Scott Bessent, who’s been overseeing George Soros’s $30 billion fortune for the last four years, will leave at the end of 2015 to start his own hedge-fund firm.
Bessent, 52, is forming Key Square Group with a $2 billion investment from Soros, according to a memo sent to employees of Soros Fund Management. That will make his firm one of the largest hedge-fund start-ups ever, even before he begins raising money from other investors.
“Over the past four years, Scott has managed the firm’s assets with skill and dedication,” said Robert Soros, George’s son, in the memo. “He has decided to start his own venture because of the constraints involved in working with a family office structure, which prevent him from raising outside capital.”
Bessent has spent much of his career managing money for Soros, overseeing his European investments for about eight years in the 1990s, and returning to the firm in late 2011. Since then, the family office has made about $10 billion in profit under Bessent as investment chief, or about 13 percent annualized, according to a person familiar with the firm who asked not to be named because it’s private.
Bessent will continue to advise the family office and remains close to Soros and his family, the memo said. After he leaves, the investment strategy and asset allocation will be managed by the existing committees that Robert Soros and Bessent put in place.
After graduating from Yale University in 1984, Bessent did stints at Brown Brothers Harriman & Co., Saudi Arabian holding company Olayan Group and Jim Chanos’s Kynikos Associates before taking a job as an analyst for Soros’s hedge fund. Soon after, he became the fund’s London-based portfolio manager, as Soros fired the European team that had been struggling to make money.
In 2000, Bessent decided to strike out on his own after Soros announced he was cutting risk and two of his lieutenants, Stan Druckenmiller and Nick Roditi, left the firm. He raised $1 billion for Bessent Capital Management, which ran a global and a European stock fund. At the time, about $150 million came from Soros.
Bessent was in the process of forming a macro fund when he was recruited by Soros’s family office in September 2011. His new fund will also try to profit from macroeconomic trends.
Bessent didn’t return a call seeking a comment.
Jack Meyer, the former head of Harvard University’s endowment, holds the record for the largest hedge-fund startup when he opened Convexity Capital Management with more than $6 billion in 2006. Druckenmiller’s former colleagues at Duquesne Capital Management opened their PointState Capital with $5 billion in 2011.