George Soros, the billionaire hedge fund manager, is closing his Quantum fund to outside investors and returning their money.
Quantum, which will continue to manage about $24.5bn of Soros family money, blamed the decision on new financial regulations requiring hedge funds to register with the Securities and Exchange Commission.
“An unfortunate consequence of these new circumstances is that we will no longer be able to manage assets for anyone other than a family client as defined under the regulations”, Jonathan and Robert Soros, Mr Soros’ sons and Quantum’s co-deputy chairmen, wrote in a letter to investors on Tuesday.
New regulations require hedge funds with more than $150m under management to report details about investments, employees and investors, and also makes them subject to possible inspections by the SEC. Mr Soros’ decision contrasts with his own reputation as an advocate for both government and corporate transparency.
A spokesman for Mr Soros declined to comment.
George Soros, the billionaire hedge-fund manager and philanthropist best known for breaking the Bank of England in 1992, will return capital to investors in order to avoid reporting requirements under the Dodd Frank reform act.
The reason? Under new requirements from the Dodd Frank act, hedge funds are required to register with the Securities and Exchange Commission by March 2012 if the fund continues to manage more than $150 million in assets for outside investors. The new requirements would call for funds to report information about the assets they manage, potential conflicts of interest, and information on investors and employees. The act allows an exemption for what the Commission considers "family office" advisers.