Tags: soros | scott bessen | hedge fund | two billion dollars

Soros Gets Most of His $2 Billion Back From Scott Bessent's Hedge Fund

Image: Soros Gets Most of His $2 Billion Back From Scott Bessent's Hedge Fund
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Monday, 14 May 2018 12:41 PM

Very few hedge fund managers start with $2 billion from investor George Soros. One who did, Scott Bessent, has already given much of it back.

As Bessent has gathered capital since his firm’s 2016 launch, he has returned Soros’s money as part of an arrangement between the two, according to a person familiar with Soros’s family office who requested anonymity.

Soros had $853 million remaining in a managed account at Key Square Group at the end of 2017, according to a March regulatory filing.

Bessent, who established a strong track record as the chief investment officer at Soros Fund Management, has gathered assets at Key Square while mostly outperforming rival macro managers. The New York-based firm had assets of about $5.1 billion at the end of last year, according to a filing.

“Soros is a very visible name,” said Richard Klitzberg, whose namesake firm helps hedge funds find investors. “If you are running money for him and you are putting up good numbers, everybody in the world wants a piece of you.”

Klitzberg said deals like the one between Soros and Bessent are not uncommon. Both sides have something to gain. Startup managers get additional cash flow. And Soros gets to continue investing with Bessent.

While Bessent was CIO, the billionaire’s family office earned about $10 billion in profit, or about 13 percent annualized.

In Bessent’s inaugural year at Key Square, he logged a 13 percent gain, followed by a 7 percent loss last year. The firm has rebounded in 2018 with an 8 percent increase year-to-date, according to investors.

Soros also benefits by paying lower fees than most Key Square investors. They pay a 1.5 percent management fee and 15 percent of profits, which is below the industry average, in exchange for locking up their money for about 2.5 years.

Soros Fund Management, which converted into a family office in 2011, allocates some of its $26 billion in assets to outside managers such as Key Square and Glen Point Capital, another macro firm. Since naming Dawn Fitzpatrick as CIO in early 2017, Soros has been pulling more money back in-house.

In addition to the money from Soros, Key Square had about $4.2 billion in assets at the end of 2017, according to filings. In the Key Square Master Fund, assets increased to $2.9 billion from $2 billion during 2017, while the number of investors jumped to 125 from 75.

Spokesmen for Soros and Key Square declined to comment.

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Very few hedge fund managers start with $2 billion from investor George Soros. One who did, Scott Bessent, has already given much of it back.
soros, scott bessen, hedge fund, two billion dollars
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2018-41-14
Monday, 14 May 2018 12:41 PM
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