NEW YORK (CNNfn) - Poor returns in emerging markets have forced billionaire financier George Soros to restructure his $20 billion Quantum hedge funds, including closing one altogether.
In a letter to shareholders Friday, Soros said he will close the Quantum Emerging Growth Fund, which has lost almost a third of its value this year alone. It has a current net asset value of $1.5 billion.
It was the emerging growth fund, along with the $969 million Quasar International Fund, that accounted for most of the losses incurred by the Quantum group when the ruble was devalued earlier this year. The Quantum group took on $2 billion in losses from its Russian investments.
The international fund, whose value has fallen 18 percent this year, also faces overhaul. It will be merged with the Quantum Industrial Holdings Funds, which is worth $2 billion.
The group's Quota Fund won't escape turmoil, either.
Along with the international fund, it is managed by London-based fund manager Nick Roditi, who is to step down temporarily due to illness. Soros Fund Management wouldn't disclose the timetable for his return.
In his absence, the fund's chief investment strategist Stanley Druckenmiller will take over.
"Mr. Druckenmiller and his team of emerging market specialists will continue to explore investments in emerging markets as we have always done here at Soros on an opportunistic basis," said Soros Fund spokesman Sean Pattison.
Shareholders will have the option to receive cash or a special class of shares in Quantum Fund, Soros's flagship fund, the letter said.
In the past four months, the Quota fund, which has a current net assets under management of $1.7 billion, has gone from gains of 32 percent to a loss of 13 percent. Since its inception in 1992, the fund has recorded an average return of 48 percent.
As recently as 1995 it returned an incredible 159.4 percent.
Investors in the emerging markets fund will be offered cash or shares in the $8.7 billion Quantum Fund.
The minimum investment in Quantum funds normally runs into hundreds of thousands of dollars.
Soros, famous as the man who broke the Bank of England in 1992 and forced the U.K. out of the European exchange rate mechanism, is reviled by Asian leaders like Mahathir Mohamad who blame him and other speculators for causing the financial crisis in the region.