George Soros

Soros offers an alternative rescue plan

Jim Kim — Wed, 01 Oct 2008 15:03:30 -0400

George Soros, once known as the Man Who Broke the Bank of England, was in Washington to make clear that he doesn't think much of the bailout plan that Congress just rejected. Rather than an RTC-like plan, he suggested an alternative that would recapitalize banks in similar fashion using preferred shares (paying about 5 percent) and warrants. This is similar to the way Warren Buffett invested in Goldman Sachs, only if private money were not available would public funds be used. Banks would be able to leverage--not a great word here--that equity immediately. Soros coupled that aid proposal with direct aid for struggling individual mortgage holders. Among the benefits: the government would not have to analyze thousands of securities in an effort to find the right price--a tough task. We've noted that pricing issues loom as the biggest obstacle to success.

For more:
- here's the article from TheStreet.com

Lehman Brothers: How bad will it get?

Jim Kim — Fri, 22 Aug 2008 07:38:15 -0400

Lehman Brothers may not be facing a Bear Stearns-like insta-implosion, but it's staring at a long, drawn out demise that may prove just as painful. At this point, we have to question its ability to survive as a standalone bank. It's clear that raising capital will not be easy. For whatever reason, the talks with Asian investors broke down. It doesn't look like selling assets is going to work out, given the credit rating and earnings implications. Losses will mount. Writeoffs will continue. Perhaps Richard Bove, of Ladenburg Thalmann, has it right: he's telling clients to buy the stock because the stage is set for a hostile takeover. Is that why George Soros is loading up? (See next item.) But that begs the question: Who would want the entire bank? They might want the asset management properties, but the rest of the store may not be worth a lot. Debt underwriting--still Lehman's big unit--has tanked, so the options here are really limited. This is water torture, but then again maybe Lehman CEO Richard Fuld has something up his sleeve.

For more:
- here's a New York Times article
- here's a Forbes article

What does George Soros see in Lehman Brothers?

Jim Kim — Wed, 20 Aug 2008 13:49:18 -0400

Last year was a sweet comeback year for George Soros. His fund was on fire. And he seemed to really understand the credit markets and the effect the temblors would have on Wall Street firms. This made his recently accumulated 10 million share stake in Lehman Brothers all the more puzzling. So what does he see? Well, as the Motley Fool notes, this could be a short term bet. The battered shares, at less than half of book value, may be due for a dead-cat like bounce (we may have seen it already, in fact). Or he may be betting that embattled CEO Dick Fuld can manage his way out this mess. Then again, he may discern something that we mortals can't. Of course, he's not guaranteed a win with this bet. Value buying hasn't been a winning strategy when it comes to financials.

For more:
- here's the article

The greatest short bets of all time

Jim Kim — Mon, 11 Aug 2008 10:06:29 -0400

When John Paulson, of Paulson & Co., bet against mortgage-backed collateralized debt obligations, he didn't hold back. His funds shorted the ABX and longed various credit default swaps--and it paid off. His $15 billion profit in 2007 is the stuff of legends. According to Business Week Online, it ranks up there with the greatest short bets of all time. George Soros is mentioned for his now legendary bet against the British pound just before it dropped out of a fixed exchange rate system. His $1 billion gain in 1992 gave him the title of "The Man Who Broke the Bank of England." Then there's Jim Chanos, the famous short, who bet correctly that Enron would collapse. Bill Ackman is noted for his big winning bet that MBIA' stock would tank.

For more:
- here's the package

The hedge fund hall of fame

Jim Kim — Thu, 26 Jun 2008 14:35:19 -0400

Alpha magazine has just released a hedge fund industry hall-of-fame list. There are 14 people on the list, most of whom you know about: James Simons, George Soros, Steven Cohen, Paul Tudor Jones and Michael Steinhardt, just to name a few. Alfred Winslow Jones, the inventor of the modern hedge fund and one of the lesser known names on the list, is credited with forming the first modern hedge fund; he pioneered the use of leverage and short selling to boost returns. Also lesser known is David Swenson, the chief investment officer at Yale University, who is known for developing the so-called Yale Model. These kinds of lists are a lot of fun. Still, some may feel left out. Notably left off: academics who pioneered the idea of modern portfolio theory.

For more:
- view the entire Alpha list

Related Articles:
Does Soros still rule?
Ranking the hedge fund elite

Hedge fund foundations thrive

Jim Kim — Thu, 19 Jun 2008 07:20:40 -0400

According to an article on Institutional Investor's website, the hedge fund industry has opened up its wallet this year, despite some tough times. So far in 2008, total annual giving by the top 25 hedge fund foundations increased 61 percent over the last 12 months to $459 million, Absolute Return figures. The top 25 hedge fund foundations now have $4.6 billion, up 31 percent from last year. The top givers were the Open Society Institute, George Soros of Soros Fund Management with $1.3 billion; the Robertson Foundation, Julian Robertson of Tiger Management with $751 million; and the Simons Foundation, by Jim Simons of Renaissance Technologies with $477 million.

For more:
- here's the article

Related Article:
Hedge funds performance holding up

Hedge funds favoring Obama?

Wed, 23 Apr 2008 06:59:55 -0400

Despite some rhetoric about getting tough on the rich, candidates Hillary Clinton and Barack Obama have not sought to make an issue out of alternative investments and their tax treatments. But of all the candidates, Obama would seem to be the least likely for top hedge fund managers to support. The New York Times reports he favors the Stop Tax Haven Abuse Act, which would limit offshore accounts that top hedge funds rely on. Still, the big hedge fund kahunas are generally lining behind the senator from Illinois. George Soros leads the list. Hillary has her supporters, too. In the end though, this may be less about personal conviction and more about getting behind whoever wins.

For more:
- here's the New York Times article

The biggest earners on Wall Street in 2007

Mon, 21 Apr 2008 06:59:56 -0400

We all know about hedge fund manager John Paulson's $3 billion take in 2007. Chances are you've heard of George Soros' stunning $2.4 billion or so take, as well. You would think the Forbes list of top earners would be interesting because it goes beyond hedge fund managers, but the first 15 spots are taken by just those (the usual suspects: Steve Cohen, T. Boone Pickens, and the like). The private equity crowd also was represented, with Steven Schwarzman of the Blackstone Group placing 16th, and Henry Kravis and George Roberts of Kohlberg Kravis Roberts placing 18th and 19th.

For more:
- here's the Forbes article and list

ALSO NOTED: Merrill Lynch's credit ratings in danger?; UBS to pay dividend in shares; and much more...

Fri, 18 Apr 2008 06:59:50 -0400

Company News:
> Merrill Lynch's credit ratings in danger. Article
> UBS to pay dividend in shares. Article
> Countrywide woes to affect Bank of America deal? Article
> Piper Jaffray posts loss. Article
> TD Ameritrade beats estimates by a penny. Article
> Is Merrill still out to raise capital? Article
> Analyst cautious on JP Morgan Chase. Article
> Citigroup sells lending and leasing unit to GE. Article

Industry News:
> Financial services not connecting with seniors. Survey
> Soros: Euro can't replace dollar. Article

Regulatory News:
> Regulators around the world eye banks. Article

And Finally... Career lessons from The Office. Article

SPOTLIGHT: Best paid hedge fund managers

Thu, 17 Apr 2008 06:59:52 -0400

We all knew about John Paulson's $3.7 billion take. But what a year for George Soros, still relevant after all. He took home $3 billion. James Simons, of Renaissance Technologies, took home $2.8 billion. The rich just keep getting richer. Article