In late January, when George Soros was interviewed in Davos, he revealed what may have been his most bearish outlook yet, revealing that he is not only short the S&P 500, saying the Fed rate hike was a “mistake” (something the Fed’s subsequent relent and global easing U-turn have confirmed), and that China will have a hard landing.
In retrospect, Soros did not factor in for the latest coordinated central bank response, which has seen not only every developed market CB rotating strongly to the dovish side, the Fed included, but culminated with China injecting a record $1 trillion in loans in the first quarter.
That may have cost the aging billionaire.
According to Bloomberg, two of the key portfolio managers working at Soros’ family office, David Rogers and Joshua Donfeld, are leaving the firm over disagreements with its new chief investment officer about the direction of global markets, according to people with knowledge of the matter.
It was not immediately clear if the PMs expected markets to keep rising or falling.
According to Bloomberg, David Rogers, a protege of Soros’s former chief investment strategist Stan Druckenmiller, managed a portfolio of about $3 billion at the $28 billion Soros Fund Management. Rogers, 38, made his name as a commodities trader, while Donfeld, 40, focuses on stock investing, said the people, adding that both men are expected to leave the family office next month.
“I don’t know what his plans are, but he’s extremely talented and he did a great job when he worked for me,” Druckenmiller said about Rogers, whom he trained at his former hedge fund Duquesne Capital Management, which boasts one of the best long-term track records in the industry. Rogers also spent some time at PointState Capital, which was started in 2010 by former employees of Duquesne after Druckenmiller closed his firm and started a family office.
Bloomberg adds that the exit of the two portfolio managers comes just months after Ted Burdickwas appointed chief investment officer to replace Scott Bessent, who started his own hedge fund at the beginning of the year. Bessent was the chief investment officer at Soros Fund Management, which oversees the personal wealth of the billionaire, from September 2011 until 2015, and is now managing $4.5 billion at his Key Square Group, including $2 billion for Soros. Both Donfeld and Rogers were hired by Bessent.
Needless to say, if the departures are due to a disagreement with Soros’ bearish bets from the start of the year, they are far more reflective of the PM’s compensation expectations, which leads us to wonder: just how much money has Soros lost during this latest market meltup from the February 11 lows, lows incidentally hit just as Yellen was concluding her confidential phone call with BoE’s Mark Carney.
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