STANLEY DRUCKENMILLER, the hedge fund manager known for making the bet that helped George Soros “break the pound”, announced his retirement yesterday, saying he was disappointed in his performance during this year’s market volatility.
For decades, Mr Druckenmiller (57) ranked among the world’s most successful macro hedge fund managers – who seek to profit from long-term economic trends – and his retirement could signal a parade of similar departures.
Dino Kos, who headed market operations at the New York Federal Reserve Bank, said: “Stan’s retirement is the end of an era.”
Mr Druckenmiller’s most famous move came in 1992 – while he was working for Mr Soros – when he correctly bet that the pound would fall against the Deutschmark. In taking on the Bank of England, Mr Druckenmiller helped shape the image of the resourceful and fearless hedge fund manager outfoxing deeper-pocketed central bankers.
In recent months, Mr Druckenmiller confessed that he – like many investors – had been confused by competing signals in the markets.
In his letter to investors, Mr Druckenmiller said that having posted positive results in 2008 and 2009, he remained hopeful that his Duquesne Capital Management would continue its “unbroken record of positive performance” in 2010. He said he was closing his fund after 30 years because results so far this year “did not match my own, internal long-term standard”. He said the demands of his job were imposing “heavy personal costs”.
Mr Druckenmiller also correctly bet on European currency movements in the 1990s.
As a member of the international advisory committee at the New York Fed and a member of the committee that advises the Treasury on borrowing, he was prescient in warning of the coming debacle in the housing market, according to participants in such discussions. – (Copyright The Financial Times Limited 2010)
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