Since 2011, Soros Fund Management has been in a weird sort of limbo. It exists to manage Soros' personal wealth, but everyone knows most of that lucre would end up with the Open Society Foundation someday anyway. And although there were ostensibly chief investment officers responsible for SFM's trading, the big guy himself would drop in from time to time to place big bets when the mood struck (causing no small amount of friction). The result, especially of late, has been some less-than-stellar decisions: going long the pound pre-Brexit, fading the Trump rally, etc.
Now the world's most successful failed philosopher has evidently decided that if he's going to fritter his massive fortune away, it might as well be other people doing so in the name of freedom and justice, rather than him doing so in the name of reflexivity or back-spasms or whatever it is guides his investment decisions these days:
George Soros, who built one of the world’s largest fortunes through a famous series of trades, has turned over nearly $18 billion to Open Society Foundations, according to foundation officials, a move that transforms both the philanthropy he founded and the investment firm supplying its wealth....Soros Fund Management LLC’s 87-year-old founder now shares influence over the firm’s strategy with an investment committee of Open Society. Mr. Soros set up the committee and is its chairman, but it is meant to survive him, people familiar with it said.
There are two immediate effects. One, Dawn Fitzpatrick now has a whole lot less to manage as CIO of Soros's personal hedge fund. And two, Open Society is now the second-largest American foundation after the Bill and Melinda Gates one. It remains an open question who will rig the global economy and manipulate Herbalife now.
But does it really change anything for Georgie? Although the Open Society investment committee is supposed to have say over where the foundation's funds go, Soros is still its chairman. It's hard to imagine an 87-year-old control freak voluntarily letting go of the most tangible testament to his own greatness (his money), especially now that it belongs to the second-most tangible testament to his own greatness (his foundation).
The migration of Soros's hedge fund cash to Open Society really just reveals a tension that has long existed between Soros's philanthropic tendencies and his moneymaking drive. It was there when he shorted the Thai baht and it played a role in his decision to invest in Russian assets even as he advised the Russian government to devalue the ruble. As his former managing director Robert Johnson once said of the latter move: “There’s a philanthropic side of George that started to interfere with the speculative one.”
With the bulk of the Soros booty in the foundation's coffers now, it's not that that tension is gone, just that it's reversed. Now, instead of do-gooder impulses butting into speculation, speculative impulses are liable to butt into good-doing. Given Soros' recent investing record, that's probably going to turn into an annoyance for everyone privileged enough to sit on the Open Society investment committee. But perhaps that's the price of sitting atop the Global Power Structure.