Ex-Soros CIO Begins Courting Capital for New Fund

Keith Anderson, the former chief investment officer for billionaire trader George Soros' money management firm, is raising money for a new macro hedge fund.

NEW YORK -- Keith Anderson, the former chief investment officer for billionaire trader George Soros' money management firm, is raising money for a new macro hedge fund, according to a person familiar with the firm.

Anderson left Soros Fund Management in June 2011 when the well-known money manager returned $1 billion in cash to outside investors and converted his firm into a family office that now manages $24 billion of money mostly belonging to Soros and his family.

Shortly after leaving Soros' firm, Anderson announced he intended to open a hedge fund but did not begin raising money until recently, said the source familiar with the fund. Anderson declined to comment through his firm's lawyer.

Before joining Soros Fund Management in 2008, Anderson spent almost 20 years at asset management firm BlackRock, which he co-founded.

Anderson's macro-focused fund, which will be based in New York, is looking to raise between $500 million to $1 billion for its launch. Macro hedge funds bet on shifts in the global economy and often specialize in trading commodities, stocks, bonds, currencies and interest rate-related derivatives. Anderson is opening his fund at a time when that strategy is coming off a rocky year.

Macro funds gained about 2.7 percent last year, when hedge funds on average rose about 6 percent. This year, macro funds are off to a better start. In January macro funds gained about 1.7 percent, according to Hedge Fund Research, trailing the industry average of 2.6 percent. Still, global macro funds attracted roughly $12 billion in new capital in 2012, despite last year's mediocre performance, according to hedge fund tracking firm eVestment.

Joining Anderson's new firm are some notable Wall Street names, including economist John Lipsky, a former top director at the International Monetary Fund and an ex-vice chairman of JPMorgan & Chase's investment bank. Also teaming up with Anderson are Douglas Paul, a former vice-chairman at Credit Suisse, and Soros alum Christopher Wiegand.

During Anderson's tenure at Soros' firm its flagship Quantum fund posted mixed results. The portfolio returned about 8 percent in 2008, when most funds lost money. It gained 29 percent the following year. But in 2010, the fund gained 2.5 percent when the average hedge fund rose more than 10 percent.

When Anderson left Soros in the Summer of 2011, the fund was down about 6 percent. Soros' firm ended 2011 down about 15 percent. A spokesman for Soros did not return a request for comment.

EUROPE STIRS THE POT

Industry analysts said Europe's debt crisis and the wild volatility that plagued markets through 2011 and 2012 prompted many investors to trust more money to macro specialists, something they believe will continue through 2013.

"There's further room for macro products in institutional portfolios given the uncertainty around how policy intervention, tightness in credit markets and flows between asset classes will eventually play out," said Minkyu Michael Cho, an analyst at eVestment. "This is the type of environment in which macro funds should able to outperform and we believe inflows will continue."

Some macro managers bucked last year's uninspiring trend. Brazilian bank BTG saw one of its macro funds, the Global Emerging Markets and Macro Funds, rise more than 28 percent. Commonwealth Opportunity Capital, an opportunistic global macro fund run by Adam Fisher, ended 2012 with gains of about 15.6 percent.

And one of the $2 trillion hedge fund industry's best-known managers decided to launch a new macro product in recent months. Paul Tudor Jones's $11.6 billion hedge fund, Tudor Investment Corp., launched a new macro vehicle called the Tudor Discretionary Macro fund last July. As of Jan.1 the fund had about $820 million under management.

Several large macro funds decided to stop taking new money or return client capital in recent months. BTG's roughly $5 billion GEMM fund closed itself to new money this year, and Louis Bacon's Moore Capital said in August he would return billions of dollars from his flagship fund to investors.