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December 18, 2019  

Soros Hires Senior Fund-of-Funds Pro

Soros Fund Management has hired a high-profile professional away from UBS to oversee its investments with outside fund managers, an area where the firm has reduced its exposure.

Betty Chen starts in Soros’ New York office on Jan. 2, assuming oversight of an undisclosed amount of allocations across external hedge funds, private equity funds and real estate funds. She had been leading research for UBS Hedge Fund Solutions, which ranks among the world’s largest hedge fund-focused fund-of-funds operators.

UBS Hedge Fund Solutions was managing $37.1 billion on Sept. 30. Its staff of 100-plus runs a robust program that includes seed-capital, acceleration-capital and co-investment deals, while using the bank’s heavyweight status to secure lower fees from the underlying managers.

Soros, meanwhile, has been seeking to reduce the fees it pays to outside managers under the direction of chief investment officer Dawn Fitzpatrick, a former UBS executive who will be Chen’s new boss.

The Wall Street Journal reported in April that Fitzpatrick had pulled $3.5 billion of Soros’ money from 27 hedge fund operators after concluding that their fees were too high and returns were too low. The firm’s portfolio contained allocations to 65 outside hedge fund managers prior to the withdrawals.

Bloomberg also reported that Fitzpatrick had been especially aggressive in reducing Soros’ exposures to global-macro funds, where the firm has paid out $300 million of fees since 2015 while taking a 1% loss on its positions. While founder George Soros made his name as a macro trader, the $25 billion operation today has money with just one manager employing the strategy, Bloomberg wrote this month.

The cutbacks tie in with a conservative approach Fitzpatrick has been implementing since she arrived in 2017, just as George Soros was transferring most of his personal capital to his charitable organization, the Open Society Foundation. That money continues to be run by Soros Fund Management.

Fitzpatrick previously led the investment team at UBS Asset Management, whose umbrella includes UBS Hedge Fund Solutions.

Chen worked at UBS since 2007. In addition to UBS Hedge Fund Solutions, she led research for traditional multi-manager funds at the bank. Earlier, she was deputy portfolio manager at private equity firm Blade Capital and spent time at Moss Adams.

At Soros, she replaces David Chiang, who left at the end of September. Chiang, a senior managing director, had arrived in 2012 from a $5 billion fund-of-funds program at Wilshire Associates.