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Strategies, and the other half of the assets are devoted to stock picking on the long and short side. The fund uses less leverage and aims for more stable returns of about 15 percent. Leverage is now only about 33 percent compared with as much as 100 percent of equity previously.

About 60 percent of the Quantum Endowment Fund is Soros's own money. Some assets are managed inside the firm and some managed outside. When Bessent started his firm with about $1 billion, it was reported that $150 million came from Soros.13 Other managers receiving Soros allocations include Darren Davy, a Bermuda-based manager, who is overseeing the global macro strategy. Sources report he is managing about $2 billion, or one-third of Soros Fund Management assets. Davy's Nexus Fund operation became exclusively affiliated with Soros in October 1999 when it was allocated $500 million.14

Robert Soros, George's 36-year-old son, is acting as coordinator in the transition. In 1994, he had previously managed private equity and real estate at the firm. He also helped run the Quantum Industrial Holdings Fund in 1996.

Brief Sabbatical for Druckenmiller

Druckenmiller said he had been discussing his departure with Soros since the end of 1998. But the Quantum Fund fell 20 percent in early 1999 and he didn't want to leave with the fund down that much.

During the first part of 1999, the Quantum Fund was positioned against Internet stocks. Druckenmiller, who managed the $8.2 billion Quantum Fund, hired Carson Levit, a Silicon Valley money manager. By the middle of 1999, the Soros Funds were buying technology stocks and selling short some Old Economy stocks. Positions included DoubleClick Inc., JDS Uniphase Corporation, and Qualcomm Inc. The strategy worked; the Quantum Fund finished 1999 up 35 percent.15

When the technology sell-off began in mid-March 2000, Soros Fund Management was still loaded with high-technology and biotechnology stocks. The Nasdaq Composite Index plunged 124 points on March 15, 2000, while the Dow Jones Industrial Average soared 320 points. In the next five days, Quantum's 2 percent year-to-date gain plunged to an 11 percent loss.16

As detailed in the Wall Street Journal, dissension between Drucken-miller and Soros came to a head over VeriSign, an Internet-security