George Soros had a net worth of $8.3 billion as of April 2020. He is the founder and chairman of Soros Fund Management LLC. He is ranked the 56th richest person in America by Forbes and in the #162 spot globally.
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 and earned him the title of "the man who broke the Bank of England." His Quantum Fund generated a 35% annualized return for 25 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 1978. The fund earned 4,200% over a ten-year period, compared to 47% for the S&P 500 Index.
Jim Rogers departed the fund in 1980. By 1981, the Quantum Fund had grown to $381 million in assets, while Soros was estimated to be worth $100 million. An Institutional Investor profile from June of that year dubbed him "the world's greatest money manager."
Ironically, 1981 was when the Quantum Fund suffered its first-ever loss, and a wave of redemptions cut its capital base in half. Soros took a break from investing and turned management of the Quantum fund over to others. He returned to full-time investing in 1984.
The fund generated a 122% return in 1985, surpassing $1.57 billion in assets under management by 1986.
Growth and Expansion
In 1988, Soros recruited Stan Druckenmiller to oversee the Quantum fund. In 1989, Druckenmiller generated a 31.5% return, followed by gains of 29.6%, 53.4%, 68.8%, and 63.2% over the next four years. It was Druckenmiller who made the infamous short against the British pound in the summer of 1992 that netted $1 billion in profit. This was followed by a short against the Swedish krona in November 1992 that notched another $1 billion gain.
Soros was estimated to have enlarged his personal fortune by $650 million that year. By 1993, assets under management had soared to $8.3 billion.
In 2011, Soros Fund Management transitioned to a family office, closing its doors to outside investors and returning about $1 billion in client money. From inception to closure, the fund earned investors $43.9 billion, dwarfed only by the $58.5 billion earned by Ray Dalio's Bridgewater fund.
Soros Fund Management now primarily exists to provide cash to the Open Society Foundations, the charitable organization started by Soros. In 2017, he gave the foundation $18 billion, bringing his lifetime total to $32 billion. That same year, Soros appointed Dawn Fitzpatrick as chief investment officer. Her job is to manage the fund's $25 billion in assets and earn at least $1 billion annually to cover the foundation's operations.