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Soros hedge fund blames SEC for exit

Tuesday 26 July 2011 – by Jacqui Street

A major US hedge fund is closing its books to outside investors blaming new US stock exchange rules.

The Soros investment firm’s Quantum Fund will become a fully family-owned business after 40 years of trading.

The company was founded in 1969 by George Soros, who became famous for becoming a billionaire by short-selling the British pound in 1992 and is also renowned for his philanthropy.

In a letter to investors, Soros’s two sons and deputy chairmen, Jonathan and Robert, say new Securities and Exchange Commission regulations will require advisers to register by March 2012.

“We have relied until now on other exemptions from registration which allowed outside shareholders whose interests aligned with those of the family investors to remain invested in Quantum. As those other exemptions are no longer available under the new regulations, SFM will now complete the transition to a family office that it began eleven years ago.”

The Soros family says the Quantum fund was repackaged in 2000 and will continue, but without outside investment.

“We will no longer be able to manage assets for anyone other than a family client as defined under the regulations.”

This year the fund was reported to have $27.9bn (€19.2bn) in assets under management and was ranked highly among international hedge funds.

The Soros’ say the company will return capital to outside investors, most likely at year end.

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