Stanley Druckenmiller

Stanley Freeman Druckenmiller[1] (born June 14, 1953) is the President, CEO, and Chairman of Duquesne Capital, which he founded in 1981. The fund is reported to have more than $10 billion in assets. He managed money for George Soros from 1988 to 2000 as the lead portfolio manager for Quantum Fund. With an estimated current[update] net worth of around $2.5 billion, he is ranked by Forbes as the 149th-richest person in America.[2] He is reported to have made $260 million in 2008.

Professional and personal lifeDruckenmiller was born in Pittsburgh, Pennsylvania, the son of Anne and Stanley Thomas Druckenmiller, who trained in chemical engineering.[3][1] Druckenmiller received his Bachelor's degree from Bowdoin College. He began his financial career in 1977 as a management trainee at Pittsburgh National Bank[4]. He became head of the bank's equity research group after one year. In 1981, he founded his own firm, Duquesne Capital Management.

In 1985, he became a consultant to Dreyfus, splitting his time between Pittsburgh and New York, where he lived two days each week. He moved to Pittsburgh full time in 1986 when he was named head of the Dreyfus Fund. As part of his agreement with Dreyfus, he also maintained management of Duquesne. In 1988, he was hired by George Soros to replace Victor Niederhoffer at Quantum Fund. He and Soros famously "broke the Bank of England" when they shorted British pound sterling in 1992, reputedly making more than $1 billion in profits. He calculated that the Bank of England did not have enough reserves to prop up the currency by raising interest rates. [5]He left Soros in 2000 after taking large losses in technology stocks.[6] Since then, he has concentrated full-time on Duquesne Capital. He is profiled in the book The New Market Wizards by Jack D. Schwager. According to Bloomberg News, on August 18, 2010, Druckenmiller announced the closing of his hedge fund "telling investors he'd been worn down by the stress of trying to maintain one of the best trading records in the industry while managing an 'enormous amount of capital.'"[7] Duquesne Capital Management posts an average annual return of 30 percent without any money-losing year. His funds were down for about 5 percent when he announced his retirement in August. However, they had since erased the losses and closed with a small gain through successful bets that the market would rally in anticipation that the Federal Reserve would announce further "Quantitative Easing" to assist in reducing unemployment and avoid deflation.[8]

Druckenmiller is married to Fiona Biggs, niece of investor Barton Biggs. Druckenmiller has three daughters.

[edit] Trading style and philosophyDruckenmiller is a top-down investor who adopts a similar trading style as George Soros by holding a group of stocks long, a group of stocks short, and use leverage to trade futures and currency.

[edit] PhilanthropyDruckenmiller donated more money to charity than any other American in 2009.[9] He gave $705 million to a foundation that supports medical research, education, and antipoverty charities.

Druckenmiller is also chairman of the board of Harlem Children's Zone, a multi-faceted, community-based project. Harlem Children's Zone was founded by Druckenmiller's college friend and fellow Bowdoin College alumnus Geoffrey Canada. In 2006, Druckenmiller gave $25 million to the organization. Druckenmiller and his wife are also principal sponsors of the New York City AIDS walk.

[edit] Pittsburgh SteelersIn July 2008, Druckenmiller emerged as a potential investor in the Pittsburgh Steelers franchise of the National Football League. The five sons of Steelers founder Art Rooney Sr. were working to restructure ownership of the team, and Druckenmiller was contacted by a member or representative of the Rooney family about buying the shares of several of the Rooney brothers. On September 18, Druckenmiller withdrew his bid to purchase the team.[10]

Former Steeler's President Dan Rooney mentioned he has no ill will towards Druckenmiller, mentioning he's a great Steelers fan and wishes he remains one.

[edit] SchoolDruckenmiller is a graduate of Collegiate School in Richmond, Virginia. He holds BAs in English and economics from Bowdoin College and graduated in 1975. He dropped out of a three-year Ph.D. program in economics at the University of Michigan in the middle of the second semester to accept a position as an oil analyst for Pittsburgh National Bank.

The Stanley F. Druckenmiller Hall, built in 1997 at Bowdoin College, is named after Druckenmiller's grandfather and was dedicated to Bowdoin by Druckenmiller himself. [11]

[edit] RetirementAccording to the Wall Street Journal, on August 18th, 2010 Druckenmiller "told clients that he's returning their money and ending his firm's 30-year run, citing the 'high emotional toll' of not performing up to his own expectations." He indicated it was not easy to make big profits while handling very large sums of money

Profile:
Stanley Druckenmiller (born 1953 in Pittsburgh, Pennsylvania) is the President, CEO and Chairman of Duquesne Capital, which he founded in 1981. The fund is reported to have more than $10 billion in assets. [1] He managed money for George Soros from 1988 to 2000 as the lead portfolio manager for Quantum Fund. With an estimated current[update] net worth of around $3.5 billion, he is ranked by Forbes as the 91st-richest person in America. He is reported to have made $260 million in 2008.

Aug. 18 2010 (Bloomberg) -- Stanley Druckenmiller, the hedge- fund icon who boasts one of the best long-term trading records and the distinction of having made $1 billion for George Soros by forcing a devaluation of the British pound in 1992, is closing his firm after 30 years.

Druckenmiller, 57, said he was tired of the stress of managing money for others and frustrated by his failure in the past three years to match returns that had averaged 30 percent annually since 1986. His Duquesne Capital Management LLC, which oversees $12 billion and has never had a losing year, is down 5 percent in 2010.

“Managing more than $10 billion seems to challenge my long-term standard” for investment performance, Druckenmiller said in a two-hour interview in his New York office on 57th Street overlooking Central Park. “For 30 years I’ve been responsible for managing client money and it’s been a joy, but at some point I need to move on. Thirty years is enough.”

“While the joy of winning for clients is immense, for me the disappointment of each interim drawdown over the years has taken a cumulative toll that I cannot continue to sustain,” he wrote to his 100 clients today.

Druckenmiller built his reputation making large bets on macroeconomic themes that he spotted before others, a skill he shares with legendary traders including Bruce Kovner, Michael Steinhardt and Soros, the Hungarian-born billionaire and his former boss. The decision to shut Duquesne suggests that in an era in which the biggest hedge funds oversee $30 billion and are adding even more assets, they may no longer be able to routinely outperform conventional funds by wide margins.

Duquesne returned about 11 percent in 2008, when hedge funds on average lost a record 19 percent, and rose about 10 percent in 2009, when the average gain was 20 percent.

Missed Opportunities

“I felt I missed a lot of opportunities in 2008 and 2009, and a huge move in bonds this year,” he said. In the past three years, his returns have trailed those of the 10 portfolio managers who manage about half of Duquesne’s capital -- a first.

Druckenmiller said he’s been thinking about retiring since he left Soros Fund Management LLC 10 years ago. He became serious about the idea three or four weeks ago, when Johann Rupert, a friend and chief executive officer of Cie. Financiere Richemont SA, the world’s largest jewelry maker, invited him to play in October at the Alfred Dunhill Links Championship in Scotland, a golf tournament in which both professionals and amateurs compete.

Druckenmiller declined, saying he couldn’t leave the office, given the history of volatile markets in October.

“Are you crazy?” was Rupert’s reply, according to Druckenmiller. “You’ve been doing this for 30 years. You are a billionaire. You can’t take a couple of days off to play golf?”

“I’d had that same thought a hundred times,”

Druckenmiller said. He said almost every family vacation had been interrupted by a work emergency.

Family Office

Druckenmiller will create a family office overseeing some of his fortune, estimated at $2.8 billion by Forbes magazine, when he winds down the firm and returns money to clients sometime in 2011.

“I plan on managing a decent chunk of my money, but only an amount that will be fun,” he said. He will invest with Duquesne portfolio managers who are planning to open their own hedge fund.

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