In August, 1998, Quantum Fund and Tiger Fund began to speculate in Hong Kong dollars. At first, they borrowed a lot of Hong Kong dollars from banks, sold them in the market, converted them into dollars and lent them out to earn interest, and sold a lot of Hong Kong stock futures. The former will lead to a sharp rise in interest rates, leading to a decline in the stock market, thus making profits in the futures market; At the same time, once the Hong Kong dollar falls, they can also make profits in the foreign exchange market, killing two birds with one stone. As a result, the Hong Kong Government raised interest rates substantially, reaching 300% in overnight rate, using nearly HK$ 654.38+02 billion (about US$ 654.38+05 billion) in foreign exchange reserves and buying a large number of Hong Kong stocks. As a result, speculators were forced to close their positions at a high price on August 28, and the losses were serious. In addition, they were frustrated in Russia and Malaysia at the same time and finally retreated. In this campaign, the Hong Kong government used a lot of foreign exchange reserves to invest in the stock market. At one time, it occupied 7% of the market value of Hong Kong stocks and became a major shareholder of some companies. Once the stock market falls, the linked exchange rate may collapse. Therefore, by June 1999 1 1, the Hong Kong stocks purchased by the Government will be listed on TraHK and sold back to the market in batches.
The crisis forced all the major currencies in Southeast Asia to depreciate sharply in a short time, and the collapse of the monetary system and stock market in Southeast Asian countries, as well as the huge pressure of foreign capital withdrawal and domestic inflation caused by it, cast a shadow over the economic development of this region.
The investment fund managed by China financier george soros is called Quantum Fund. Soros's quantum fund is a high-risk fund, which mainly borrows money to invest in global stocks, bonds, foreign exchange and commodities. The Quantum Dollar Fund is registered with the US Securities and Exchange Commission, and mainly raises funds through private placement. It is said that Soros named it "quantum" because Heisenberg, a German physicist and founder of quantum mechanics, whom Soros admired, put forward the "uncertainty theorem". Soros believes that just as the physical quantum of particles cannot have a definite value, the securities market is often in an uncertain state, so it is difficult to measure and estimate accurately.
Soros is the chairman of the board of directors of LCC Soros Fund, and the Private Investment Management Office confirmed that he is a consultant of Quantum Fund Group. Quantum fund is the oldest and largest fund in the quantum group, and it is generally considered as the best performance of any investment fund in the world in its 28-year history.
Soros manages five hedge funds with different styles. Among them, Quantum Fund is the largest one and one of several large hedge funds in the world. Quantum Fund was originally founded by Soros and another famous hedge fund, jim rogers, in the late 1960s. At first, its assets were only $4 million. The fund was established in new york, but the investors are all non-American foreign investors, thus evading the supervision of the US Securities and Exchange Commission. Quantum funds invest in commodities, foreign exchange, stocks and bonds, and make extensive use of financial derivatives and leveraged financing to engage in all-round international financial operations. Soros, with his extraordinary analytical ability and courage, guided the quantum fund to grow and develop again and again in the world financial market. He has accurately predicted the extraordinary growth potential of an industry and a company for many times, and thus obtained extraordinary returns in the rising process of these stocks. Even in the bear market where the market fell, Soros made a lot of money with his superb short-selling skills. After less than 30 years of operation, by the end of 1997, the quantum fund has grown into a giant fund with total assets of nearly 6 billion US dollars. By the end of 1996, the 10000 injected by Quantum Fund had increased to $300 million, an increase of 30,000 times.
Soros became a hot figure in the international financial community because he launched several large-scale currency sniper wars with the help of quantum funds in the mid-1990s. With its abundant financial resources and fierce style, Quantum Fund has been making waves in the international currency market since the 1990s, often attacking currencies with weak foundations and succeeding repeatedly.
Although the quantum fund has only $6 billion in assets, it has become a decisive force in the international financial market because it can obtain the investment effect equivalent to tens of billions or even hundreds of billions of funds through leveraged financing and other means when needed. At the same time, due to Soros's fame, the whereabouts and betting direction of Quantum Fund are followed by large-scale international hot money. Therefore, every move of quantum fund often plays a key role in the fluctuation trend of a country's currency. Hedge funds often attack a currency by short-selling it on a large scale in the forward and futures and options markets, thus causing depreciation pressure on the currency. For countries with foreign exchange reserves, after futile market intervention, the only way left is often to devalue their currencies, so that short hedge funds can make a lot of money. Soros and his quantum fund were directly responsible for several serious currency crises in the 1990s.
In the early 1990s, in order to cooperate with the linked exchange rate within the European Union, the exchange rate of the pound was artificially fixed at a high level, which triggered an attack from international currency speculators. Quantum Fund took the lead in launching an attack, selling pounds on a large scale in the market and buying German marks. Although the Bank of England made great efforts to throw out the Deutsche Mark to buy the pound, accompanied by measures to raise interest rates, it was defeated by the attack of the Quantum Fund, and the pound was forced to withdraw from the European currency exchange rate system and float freely. In just 1 month, the exchange rate of the pound fell by 20%, and the quantum fund made huge gains of hundreds of millions of dollars in this pound crisis. Shortly thereafter, the Italian lira suffered the same fate, and the Quantum Fund also played the leading role.
1994 Soros quantum fund attacked Mexican peso. Before 1994, the healthy growth of Mexico's economy was based on excessive dependence on short-and medium-term foreign loans. In order to control domestic inflation, the peso exchange rate is overvalued and pegged to the US dollar. The attack on the peso initiated by Quantum Fund led to the collapse of Mexico's foreign exchange reserves in a short time, and it had to abandon its peg to the US dollar and float freely, leading to the collapse of the Mexican peso and the domestic stock market. Quantum Fund made a lot of money in this crisis.
1997 In the second half of the year, a financial crisis occurred in Southeast Asia. Mexico, Thailand, Malaysia, South Korea and many other Southeast Asian countries, such as 1994, have long relied on short-term and medium-term foreign debts to maintain the balance of payments, and their exchange rates are high, and most of them are fixed or linked to the US dollar or a basket of currencies, which provides good opportunities for international speculative funds. Quantum fund played the role of sniper, starting with a large number of short selling of Thai baht, forcing Thailand to abandon its long-term fixed exchange rate pegged to the US dollar and float freely, thus triggering an unprecedented crisis in Thailand's financial market. The crisis quickly spread to all countries and regions in Southeast Asia where currencies are freely convertible, forcing all major currencies in Southeast Asia to depreciate sharply in a short period of time, and the collapse of the monetary system and stock market in Southeast Asian countries, as well as the huge pressure of foreign capital withdrawal and domestic inflation caused by it, cast a shadow over the economic development of this region.
When Soros's quantum fund suffered serious losses in April 2000, it seemed to mark the end of an era. However, Soros did not set up a closed-end fund like George W. Julian Robertson, but reorganized the fund and even outsourced some portfolios to managers outside the company. Obviously, this super investor, philanthropist and amateur philosopher does not intend to continue to be an important force in the global market. "I won't set another record," he said at the news conference.
However, Soros is back now. Besides, as a world-class investor, he seems to be regaining some honors he lost earlier, despite the controversy caused by his internal transactions in France. According to people familiar with Soros Fund Management Company, the 72-year-old financier has returned to the helm of the company. Although Soros still devotes a large part of his energy to charity, he has begun to regain control of the $7 billion quantum fund and other investments. An analyst who has been paying attention to Soros for a long time said: "He sometimes says that he is 70 years old and doesn't want to gamble any more, but this is not true. He works hard to make money as before. "
His management is very effective. The yield of Quantum Fund 200 1 was 13.8%, while the S&P 500 index fell 13%. At that time, the quantum fund was mainly managed by outsiders. In 2002, with the recovery of internal management, Quantum Fund fell by 0.5% to 65,438 points on February 6, which was 2 1 percentage point better than the Standard & Poor's Index. It is important that Soros no longer makes waves for the benefit, as he did in the money market before. 1992, his bet on pounds brought him huge profits.