In one of the most visible moves as a result of the new
SEC regulations on investment advisers, George Soros is closing his $25 billion
Quantum Endowment Fund to outside investors and returning their money.
"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 re no longer available under the new regulations, SFM will now
complete the transition to a family office...."
The Soros fund management company would have to register
as an investment adviser and it doesn't want to do that. They are kicking out
non-family money and using the family office exemption to avoid registration.
Is this a good thing? Soros is a controversial figure,
reviled for some because of his currency bets. For his investors, he returned
about 20 percent a year, on average, since 1969. If some of those investors
invest your retirement money, then you may be worse off.
It's clear that the regulatory regime changes resulting
from Dodd-Frank are going to change the business models for many money
managers. Some, like Soros, will pull back operations to avoid the regulatory
additional commentary on developments in compliance and ethics, visit Compliance Building,
a blog hosted by Doug Cornelius.
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