Soros Picks New Family Office CIO | Chief Investment Officer

Soros Fund Management has named Ted Burdick CIO following Scott Bessent’s end-of-year departure to launch a hedge fund.

The appointment was announced in a letter distributed to employees and obtained by CIO. Burdick has been affiliated with George Soros’s firm since 2000, when he joined as an analyst in London. Most recently, Burdick led the $30 billion family office’s internal distressed debt and arbitrage groups.

Burdick replaces Bessent, who announced in August that he would leave Soros to start his own fund after four years as CIO. The hedge fund startup, Key Square Group, launched this week with $2 billion from Bessent’s former employer, and will manage $4.5 billion by the end of its first quarter, according to Bloomberg.

Soros itself was a hedge fund until 2011, when it closed to outside investors, and still operates like a hedge fund. Renee Neri, a principal at executive search firm Heidrick & Struggles, said the particular investment style of a family office can have a big impact on who would make a suitable CIO candidate.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

“Given the platform, one would need a CIO who deeply understands operating in a hedge fund-like environment,” Neri said.

In Neri’s experience as a recruiter, CIO positions at family offices like Soros can be very in-demand, depending on who the family is.

“Typically it’s dictated by the family, who the principal is, if it’s someone who has a marquee name, someone who is exceedingly respected, if they’ve done interesting things—typically, that draws a lot more attention,” Neri said. “The reputation of the office itself and the family, whether it’s been a stable environment—that is another factor people think about when they’re thinking about family office CIO roles.”

Once a prospective hire nabs the job, Neri said the two most important qualities of a successful tenure are trust and patience.

“The key to success in operating in a family office environment is the ability to establish a pretty quick trust-based relationship with the principal,” Neri said. “This is not your own P&L (profits and losses) that you’re managing, this is someone else’s capital that you are overseeing.”

London-based Nevsky Capital has announced it will shut its flagship $1.5 billion hedge fund and return cash to its investors.

The firm said adverse market conditions and increased computer-driven trading by index funds have led to the long/short global equity product’s demise after 15 years.

“It is more difficult than ever before for us to accurately forecast macroeconomic and corporate variables.”“We have come regretfully to the conclusion that the current algorithmically driven market environment is one which is increasingly incompatible with our fundamental, research-oriented investment process,” CIO Martin Taylor said in a release.

Nevsky projected continued challenges for emerging and developed markets due to the US Federal Reserve’s rate rises outpacing market discounting, and China’s slowing growth.

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

The soon-to-close Nevsky Fund returned 18.4% annually since its inception in September 2000, according to firm data, compared to 2.5% for an average hedge fund for the same time period.

But recent performance has been lackluster: the flagship lost 1.4% in 2014 and gained 0.4% in 2015, as shown in a December 2015 investor letter acquired by ZeroHedge.

“It is more difficult than ever before for us to accurately forecast macroeconomic and corporate variables,” Nevsky wrote in the letter. “This pushes up our cost of capital and substantially increases the risk of us suffering substantial capital loss on individual positions.”

Various trends contributed to the fund’s closing, Taylor continued, including deteriorating data quality, declining transparency in economic policy and equity markets, and increasing tail risk.

“This has made what we enjoy most—the thrill of analyzing economic data releases and company accounts—no longer enjoyable,” the letter said.

The firm told CIO investors have until end of February to redeem their shares.

Nevsky is the latest in a string of hedge funds closures.

Long/short credit specialist Lutetium Capital revealed Monday it had liquidated its $150 million portfolio. In December, $8 billion BlueCrest Capital Management announced it was returning investor capital and turning into a family office.