What some people will do to avoid the new regulatory landscape.  George Soros will close his hedge funds to outside investors and return all fund money belonging to outside investors - less than $1 billion.  Mr. Soros’s funds have been closed to outsiders since 2000, when Stanley Druckenmiller, his former chief investment officer, left the firm to start Duquesne Capital Management.  Now, before you think he's going into semi-retirement, consider that Mr. Soros will continue to manage some $26 billion. 

The move comes as the Obama administration takes steps to bring the secretive hedge fund industry under regulation.  By converting Soros Fund Management into a family office, Mr. Soros will be able to avoid hedge fund registration and other regulatory requirements.  fund sent to investors on Monday.

“An unfortunate consequence of these new circumstances is that we will no longer be able to manage assets for anyone other than a family client as defined under the regulations.”   -- Jonathan and Robert Soros, co-chairman of the funds, in letter to investors..

Soros Management and Historical Fund Performance.    The fund, which has existed in many iterations in its more than 40-year history, has reportedly returned about 20% a year on average.  The fund is down 6% this year. 

When it transitions into a family office, the operation, which now has more than 200 employees and 100 investment professionals, will continue to employ some 100 people.  In the letter to investors, the firm also said that Keith Anderson, chief investment officer at Soros since 2008, would be leaving to seek other opportunities.  [Dealbook, 7/26/11]