Cover Story THE MAN WHO MOVES MARKETS --- SUPER-INVESTOR AND BENEFACTOR GEORGE SOROS
IS THE SCOURGE OF EUROPE'S CENTRAL BANKS
Gary Weiss in New York and Gail E. Schares in Budapest, with Geri Smith in Mexico City, Paula Dwyer in London,
Neal Sandler in Jerusalem, Karen Pennar in New York, and bureau reports 08/23/1993
Copyright 1993 McGraw-Hill, Inc.
There is a point beyond which self-revelation can be damaging, and one of the flaws in my character, which I have not fully fathomed, is the urge to reveal myself. --George Soros, The Alchemy of Finance, 1987 It is a hot day in New York, and something unusual is about to happen on the 33rd floor of a building at the corner of 57th Street and Seventh Avenue. These are the offices of George Soros, the most powerful and successful investor in the world, a man whose actions and utterances can rock world financial markets, infuriating central bankers and playing a major role in derailing
the European currency system. George Soros is about to give an interview. And Gerard Manolovici, a veteran Soros portfolio manager, is upset. "Gary, you've got to stop it," he says to Gary Gladstein, Soros' chief administrator. "I'm serious. You've got to stop this story." Gladstein smiles. "We don't like publicity around here," he explains to a reporter. "We like to keep a low profile." But if the Soros investment managers are loath to reveal themselves to the world, that sentiment is not--nowadays--shared by their complex, billionaire overlord. For the better part of a year, Soros has been regularly making his views known to the world--but only rarely through interviews such as his talk with BUSINESS WEEK (page 52). He prefers to avoid the media middleman--the American press in particular. Instead, he communicates his views directly--by articles in newspapers, statements to wire services, and letters to the editor, all written in a distinctive style that combines courtliness, scholarship, and, at times, a touch of condescension. RIDING HIGH. Soros' public statements have made central bankers cringe--particularly in Europe, where exchange-rate mechanisms force them onto the opposing side of Soros' trades, and where, more often than not, they wind up as losers. Soros' latest pronouncement, made on German TV, was reported to the world on Aug. 4: He is selling the mark and buying dollars. And sure enough, as if by magic, the mark declines, the dollar rises.
When Soros disclosed his 14% stake in Newmont Mining Corp. in late April, investors bought Newmont stock, other mining stocks climbed, and bullion bounced. And the world of global real estate is now agog over his partnership with the fallen real estate giant Paul Reichmann of Olympia & York Developments Ltd. Soros and Reichmann are jointly embarking on $1.5 billion in commercial projects in Mexico City and are exploring other
ventures that could help bring commercial real estate out of its prolonged depression. But in the interview, Soros was conspicuously untalkative about gold and real estate--and he sternly denied speculation he is betting on a revival of global inflation. Soros is riding high. He has apparently managed to sidestep the only major threat to his stature in recent years—the Treasury-auction scandal at Salomon Brothers Inc. Soros and his management firm have been named in a class action suit as participating in the scandal, but they have never been cleared--or charged--by federal authorities. But Gladstein, in the firm's first public comment on Salomon, says that the Soros organization has been assured it is not a target of any federal investigation. Gladstein says the Soros people do not intend to settle the litigation and "hope" that they will be dropped from the suit. INTELLECTUAL GAME. Soros is more than just an ultrarich global investor. He has also underwritten a philanthropic empire that makes him the single most influential private citizen between the Rhine and the Urals (table, page 58)....
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