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How did George Soros make his fortune?

George Soros arrived in the United Kingdom from Budapest in 1947 and graduated from the London School of Economics in 1952. While at the London School of Economics he was influenced profoundly by the work of Karl Popper and his book The Open Society and Its Enemies. Popper was Soros's tutor during his final year at the London School of Economics. Soros's interest in Popper led him to the development of his theory of reflexivity, which Soros says has guided him both as an investor and a philanthropist. (To hear Soros discuss reflexivity, click here.)  

Upon graduation, Soros was hired as a traveling salesman by a manufacturer of cheap handbags and souvenirs. In the mid 1950s, after a series of attempts to land a job in finance, he was hired as an arbitrage trader at Singer & Friedlander, a merchant bank run by two fellow Hungarians.

In September 1956, at age 26, Soros sailed to New York to begin a job at Wall Street brokerage firm F.M. Mayer. He had been recommended for the position by the owner’s son, who had been a colleague at Singer & Friedlander. At F.M. Mayer he specialized in arbitrage trading of foreign securities. He quickly found success, attracting prestigious clients including S.G. Warburg in London and Morgan Stanley in New York.

Within three years he moved to Wertheim & Co., another investment firm, where he stayed until late 1962. In 1963, before accepting a new position at the investment firm Arnold & S. Bleichroder, he took a few months off to focus on a book of philosophy he had been writing for years.

In 1966, still working at Arnold & S. Bleichroder, he used $100,000 of the firm’s capital as seed money to establish the First Eagle Fund. The success of that fund helped him build valuable relationships within the investment community.

In 1973 he left Arnold & S. Bleichroder to set up his own hedge fund with $12 million with money from investors. Initially called the Soros Fund, it was eventually renamed the Quantum Fund. In 2000 the Quantum Group of Funds was reorganized and the flagship Quantum Endowment Fund was established. Soros Fund Management LLC is the principal advisor to the Quantum Endowment Fund. George Soros is the Chairman of Soros Fund Management. The firm's day-to-day operations are managed by Soros's two elder sons and by the firm's CIO. The fund has assets of approximately $27 billion.

Most frequently asked questions about George Soros’s investments:

Was George Soros involved in the 1997 Asian Financial Crisis?

In 1997, as economies were crashing across Asia, Malaysian Prime Minister Mahathir Mohammad attributed the crisis to currency traders, in particular George Soros, and called for such trading to be banned.

The Quantum Fund had not been involved in selling Malaysian currency during or for several months prior to the crisis, however, and in 2006 Mohammad acknowledged that fact and publicly apologized to Soros.

What was his famous “Bank of England” investment? 

In 1992, with the economy of the United Kingdom in recession, Quantum Fund’s managers anticipated that British authorities would be forced to break from the European Exchange Rate Mechanism (ERM) then in force and allow the British pound to devalue in relation to other currencies, in particular the German mark.   

Quantum Fund sold short (betting on a decline in value) more than $10 billion worth of pounds sterling.

On September 16, 1992—later dubbed “Black Wednesday”—the British government abandoned the ERM and the pound was devalued by twenty percent.

Was George Soros convicted of insider trading in France?

In the summer of 1988 France’s new government under Socialist Francois Mitterrand was calling on investors to buy shares in newly privatized French companies. Soros, like many investors, was looking into purchasing shares in a basket of those mostly undervalued entities. In the fall of 1988, one of his advisors was contacted by a French businessman attempting to assemble a group of investors to purchase shares of Société Générale, one of the oldest and largest banks in France. 

The advisor reported to Soros that the information he received from the businessman was ambiguous and the plan implausible. Soros decided not to participate, never in fact meeting the businessman or signing a confidentiality agreement. He continued with his original plan and instructed his traders to purchase a limited number of shares in a basket of four French privatized entities, including Société Générale. 

Soros had received no information from the Société Générale itself and had no contact whatsoever with it. However, the French stock exchange regulatory authority (COB) raised the question of whether his knowledge that a group of investors was planning to buy a large number of shares in the company constituted insider information. After conducting a thorough investigation the COB concluded that no charges should be brought against Soros, because the statutes, regulations and case law relating to insider trading did not sufficiently or clearly establish that a crime was committed. 

Despite that conclusion, several years later a Paris-based prosecutor filed charges against Soros and two other French businessmen. The two other defendants were acquitted, but Soros was convicted of insider trading in 2005 by the Court of Appeals. The French Supreme Court confirmed the conviction, but reduced the penalty to 940,507.22 €, the minimum sentence. 

On August 31, 2010, the European Court of Human Rights accepted Soros’ complaint that the conviction violates a key tenet of European law, that no person may be punished for an act that was not a crime at the time it was committed. 

On October 6, 2011 the European Court of Human Rights decided 4-3 against Soros.  The three dissenting Judges issued a strong written dissent. Under the rules of the Court, this decision is not a final decision and is subject to an appeal to the Court's Grand Chamber.  Mr. Soros intends to appeal.