Banks and hedge funds – a case of trading places

George Soros may be more interested these days in his charities, geopoliticsand philosophy, than he is in finance. But, like an old sailor, the talent ofsmelling which way the wind is blowing has yet to completely aban- don him.

Soros Fund Management has hired Steven Mnuchin, the chief information officerat Goldman Sachs Group until last year, to run a new unit called SFM CapitalManagement. Its business: lending money to companies, in particular to ones runninginto difficulties.

On the surface, it looks as if Mnuchin, like many other ambitious young financiersin the past few years, is jumping from banking to the faster-growing hedge-fundindustry. But scratch below the surface, and a slightly different picture emerges