By Kevin Max
NYTimes.com/TheStreet.com, 11:05 a.m.
The managers of George Soros' investment firm, Stanley Druckenmiller and Nicholas Roditi, are leaving the world's biggest hedge fund following losses of about $5 billion in the volatile stock market this month.
Druckenmiller had reportedly been betting heavily on technology companies just before the technology-laden Nasdaq Stock Market lost more than a third of its value in the first two weeks of April.
In a letter to shareholders given to reporters on Friday, Soros said he would retool his flagship Quantum Fund, which Druckenmiller ran on a day-to-day basis, as a lower-risk, less speculative fund.
"We have come to realize that a large hedge fund like Quantum Fund is no longer the best way to manage money," Soros wrote. "Markets have become extremely unstable and historical measures of value at risk no longer apply."
[ At a press conference on Friday, Soros said that Quantum had enough liquidity to meet any investor redemptions. Assets under management at the fund have shrunk from $10.36 billion at the end of 1999 to $8.25 billion in mid-April, Reuters reported.
Soros said Quantum would be renamed the Quantum Endowment Fund, but did not name a successor to Druckenmiller.
It was not immediately clear whether Soros Fund Management sold all or part of its technology bets or what those holdings included. Hedge funds, which are investment funds that often take big risks, are not required by law to regularly report their asset holdings.
But Bigdough.com, a Web site that tracks institutional holdings, said the top stocks held by the Soros firm include Oracle , Genentech , Sun Microsystems , Veritas , Qualcomm , Nextel , and Microsoft .
Coming into the year, Soros Fund Management also had more than $166 million in drug discovery company Curagen , which has lost more than a third of its value in the year to date. Globalstar Telecommunications , a satellite-based telecommunications company which accounted for 7.5 percent of Soros Fund Management at the end of 1999, dropped more than 75 percent when large telecom companies sank money into building land-based wireless applications. The Soros firm sold their 5 percent stake in the beleaguered company last week.
Often, hedge fund managers borrow large sums of money to buy stocks and other types of investments. The turbulent market has heaped more risk on the strategy.
Druckenmiller, 46, is a highly regarded fund manager who has spent many years working for Soros, a legendary multibillionaire known for taking big risks in global financial markets.
Roditi, 54, managed the $1.2 billion Quota fund under Soros.
Together, Druckenmiller and Roditi managed nearly two-thirds of the Soros firm's total assets.
[end]
Carl
________________________________________________________________________ Get Your Private, Free E-mail from MSN Hotmail at http://www.hotmail.com