Soros to return to hands-on trading, sees market shifts

Billionaire investor George Soros has become more involved in trading at his family office, concerned about the outlook for the global economy and the risk that large market shifts may be at hand, according to a person familiar with the matter.

Soros, 85, has been spending more time in the office directing trades and recently oversaw a series of big, bearish investments, said the person, who asked not to be identified discussing private information. Soros Fund Management LLC sold stocks and bought gold and shares of gold miners last quarter, anticipating weakness in various markets, according to a government filing.

A New York-based spokesman for Soros declined to comment in an e-mail to Bloomberg News.

The octogenarian and philanthropist, who built a $24 billion fortune through savvy wagers on markets, has taken a dim view of the world economy and particularly of China. In April, Soros said China’s debt-fueled economy resembles the US in 2007-08, before credit markets seized up and spurred a global recession. Most of the money that banks in China are supplying is needed to keep bad debts and loss-making enterprises alive, Soros said at the time.

In January, the former hedge-fund manager said a hard landing in the Asian nation was “practically unavoidable,” adding that such a slump would worsen global deflationary pressures, drag down stocks and boost US government bonds.

His bearish view prompted him to pare back his US stock investments by more than a third last quarter, betting against the equities while banking on gold. The value of Soros Fund Management’s publicly disclosed holdings dropped by 37 percent to $3.5 billion at the end of March, according to a government filing in May.

Soros’s former chief strategist, billionaire investor Stan Druckenmiller, echoed Soros’s view on gold, saying last month that the yellow metal is his largest currency allocation as central bankers experiment with the “absurd notion of negative interest rates.”

The Wall Street Journal earlier reported that Soros had become more involved in the firm’s trading. (Bloomberg)