George Soros has a net worth of $8.3 billion as of Feb. 7, 2020, and is the founder and chairman of Soros Fund Management LLC. He is ranked the 56th richest person in the world by Forbes. Soros amassed his fortune as one of the world's greatest speculators in the global financial markets. His famous bet against the British pound in 1992 generated more than $1 billion in profits in 24 hours and earned him the title of "the man who broke the Bank of England." His Quantum Fund earned a 33% annualized return for more than 30 years. His philanthropic activities have garnered much acclaim, while his political statements have sparked much controversy.
This is how the legendary George Soros made his fortune.
George Soros was born in Budapest, Hungary, on August 12, 1930. His Jewish birth surname was Schwartz. His father changed his last name to Soros in 1936 to avoid potential problems with their religion. His father, Tivadar, was a World War I prisoner during the Russian Revolution, who successfully escaped Russia to rejoin his family in Budapest.
Soros experienced the growing persecution of Hungarian Jews during the Nazi occupation. He aided his father in forging thousands of documents to help his countrymen flee Hungary during the Holocaust. The family regularly went into periods of hiding, sometimes separately. Soros honed his survival skills during these times.
Wall Street Bound
By 1947, Soros enrolled in the London School of Economics. His mentor, Karl Popper, was a philosopher who coined the term "open society," which was the opposite of the dictatorships that Soros had lived through and loathed. His philanthropic and philosophical views were molded during this time. Four years after his graduation, Soros landed a financial position at a London bank.
In 1956, Soros moved to the United States to procure a position as an arbitrage trader at New York-based firm, F. M. Mayer. Soros worked at a number of Wall Street firms as a trader and analyst. The tipping point was when he managed his first offshore fund, First Eagle Fund, at Arnold and S. Bleichroeder in 1967. His success led him to launch a second fund called the Double Eagle Fund in 1969.
Soros and his assistant, Jim Rogers, left the firm and formed Soros Fund Management in 1973. Structured as a hedge fund, it was renamed the Soros Fund and eventually became the Quantum Fund in 1979. The fund earned a 3,365% return since inception, compared to 47% for the Standard and Poor's 500 (S&P 500) Index during the same period.
By 1981, the Quantum Fund had grown to $381 million, while Soros was estimated to be worth over $100 million. Jim Rogers resigned from the firm the same year that Institutional Investor dubbed George Soros as "The World's Greatest Money Manager" in its June 1981 cover story. Soros could no longer be anonymous. He outsourced the day-to-day management of the Quantum fund to several different managers. The fund generated a 122% return in 1985, surpassing $1.5 billion in assets under management by 1986.
Growth and Expansion
Soros recruited Stanley Druckenmiller to manage the Quantum fund in 1989. Druckenmiller proceeded to generate a 40% annual average return by 1993. The infamous short against the British pound trade in 1992 generated over $1 billion in profits, in addition to generating an estimated $1 billion in profits from trades on the Tokyo Stock Exchange, Swedish krona, and Italian lira. Soros was estimated to have earned $650 million that year.
In 1993, Soros was the first American to earn over $1 billion annually, when the Quantum Fund generated a 61.5% annual return. Soros diversified investments with the creation of several new funds under the Quantum umbrella, including the Quantum Realty Fund in 1993 and the Quantum Industrial Holdings Fund in 1994, which was managed by Druckenmiller.
Soros Fund Management LLC is now a privately owned family office, with all outside investor money having been returned. Over its history as a hedge fund, Soros Fund Management returned $43.9 billion to investors, the second highest, after Ray Dalio's Bridgewater, at $58.5 billion.
Soros Fund Management's total assets under management are estimated at $25 billion as of 2019. In 2017, Dawn Fitzpatrick was hired to manage the family office as Chief Investment Officer. The Fund now mainly manages the charitable organization, Open Society Foundations, of Mr. Soros, after he donated $18 billion to it.