George Soros’s family office is spinning out its private equity team, which oversees about $2 billion, and has pledged to allocate up to $2 billion more to the group.
The 25-member team, led by 20-year Soros veteran David Wassong and Ravi Yadav, will manage a majority of the existing assets, in addition to the new investment, according to people familiar with the decision. The firm, which has yet to be named, also plans to raise money from outside investors. The move is effective today.
The departures mark another wave of personnel changes under Dawn Fitzpatrick, who joined New York-based Soros Fund Management as chief investment officer last year from UBS Asset Management. Fitzpatrick has been refocusing the business since Soros transferred the bulk of his wealth to his Open Society Foundations late last year. Most of the firm’s about $25 billion now belongs to the foundations rather than to the Soros family.
“In light of this, we have been implementing strategic changes to SFM’s investment approach with respect to portfolio construction, liquidity, risk allocation, and time horizon of investments,' Fitzpatrick wrote in a memo to employees announcing the news. “The spin-out of part of our internal private equity business is an outcome of these changes. In this new construct, both entities will continue to benefit from 15 years of successful collaboration.”
Soros will retain a private equity fund team run by David Chiang, and will continue to make direct private capital investments, one of the people said.
While at Soros, the unit made direct investments in companies and management teams and started almost 50 businesses from scratch. The group’s biggest deal was in 2008, when it bought grain merchant Gavilon Group with Ospraie Management and General Atlantic for $2.75 billion. Soros put up $400 million. Gavilon was sold to Marubeni Corp. in 2013 for $3.6 billion.
Yadav joined Wassong in 2005 to help rebuild Soros’s private equity business after the firm spun off its previous buyout unit, which regrouped as TowerBrook Capital Partners.
Under Fitzpatrick, there have been several new hires and a number of departures -- moves within the “normal course of reshuffling” associated with bringing on a new executive, the firm said at the time. Fitzpatrick is the seventh CIO since the departure of legendary trader Stanley Druckenmiller in 2000.
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