The Druckenmiller Connection: Meet the Man Behind Bessent and Warsh — Barrons.com

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Teva Pharmaceutical Industries

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By Andy Serwer and Matt Peterson

If President Donald Trump's pick for Federal Reserve chair, Kevin Warsh, is confirmed by the Senate, it will put Wall Street investor Stanley Druckenmiller in the unusual position of having mentored two of the most powerful financial leaders in Washington, nay the world, in Warsh and Treasury Secretary Scott Bessent, who also worked for Druckenmiller. It also means that Stan, or "Druck" — he is known by both on the Street — would be in the enviable position of having a direct connection to the heads of both the Fed and Treasury.

Druckenmiller, 72, a highly influential, long-short macro investor with a sterling track record, has been critical of fiscal policy and particularly Fed policy in recent years. When asked about his acolytes, he sounds pleased they could be in a position to implement change.

"To have this kind of competence at the Treasury and this kind of competence in the Fed is something I haven't seen in a pair in decades, maybe [since] Rubin and Greenspan," Druckenmiller told Barron's. "I know they're gonna work together. And they both have market experience. They both have big brains. Kevin is a great communicator. Scott's become a much better communicator. I'm hopeful, and I had no hope before these two were paired together. Even though I was the boss of each of them at one point, they both got IQ points on me."

A blunt-spoken, low-profile sort, Drucknenmiller started and ran hedge fund Duquesne Capital from 1981 to 2010. According to Bloomberg, Duquesne posted an average annual return of 30% and never had a money-losing year. After Druckenmiller closed Duquesne Capital, he opened and has continued to run Duquesne Family Office, which manages his personal multibillion-dollar fortune.

From 1988 to 2000 Druckenmiller also worked for hedge fund manager George Soros (a liberal Democratic nemesis of President Donald Trump's) as lead investor for Soros Fund Management (SFM) and its Quantum fund. Druckenmiller's own politics tend toward middle-of-the-road Republican. He supported Nikki Haley in the 2024 Republican Party presidential primary, and later said he would vote for neither Donald Trump nor Kamala Harris in the 2024 U.S. presidential election.

Treasury Secretary Bessent, 63, worked with Druckenmiller at SFM from 1991 to 2000, which included a particularly noteworthy period in 1992 when the firm shorted the pound sterling. In what became known as Black Wednesday, Soros and his team famously "broke the Bank of England," reportedly making Quantum a remarkable $1 billion profit.

Bessent would leave Soros to set up his own hedge fund, then return to SFM, then leave again in 2015 to found another hedge fund, Key Square Group, which had mixed results.

"Stan has been a mentor to many, particularly in his approach to managing risk," says Paula Volent, chief investment officer of Rockefeller University. "He also has a great track record in identifying great talent." Volent worked closely with Druckenmiller when she ran Bowdoin College's endowment. ( Druckenmiller graduated from Bowdoin in 1975 and has chaired the college's investment committee.)

As for Warsh, Druckenmiller has had a tight relationship with him in recent years. After serving as a member of the Board of Governors of the Federal Reserve System from 2006 until 2011, during which he worked closely with Fed Chair Ben Bernanke to mitigate the 2008-09 financial crisis, Warsh joined the Duquesne Family Office as a partner and advisor, where he's worked closely with Druck. Warsh, 55, and Druckenmiller sit 10 feet apart, according to Druckenmiller, with Warsh serving as a Fed-whisperer sounding board to Druck's macro-trader sensibility.

Warsh runs the firm's private-equity investments, according to Druckenmiller. Warsh and Druckenmiller have also co-authored Wall Street Journal Opinion pieces and both think the Fed should be more forward-looking and rely more on forecasting rather than be backward-looking and data-dependent.

"I was rooting for Kevin because I've been very close to him and a friend, but this ain't good for me," says Druckenmiller about Warsh leaving to become Fed chair. "He's a friend, he's a confidant, and he's like a Swiss Army knife. He's helpful with the economy. So I'm gonna miss him."

Warsh is married to Jane Lauder, the billionaire granddaughter of Estée Lauder, who founded the cosmetics company that bears her name. Warsh's father-in-law is Ron Lauder, a longtime friend of Trump's. As such, Warsh is a known quantity in upper-echelon social, political, and economic circles. "He's an unbelievable networker, and I'm like a zero on a scale of one to 10 on networking," says Druckenmiller.

Warsh has a number of high-profile allies on Wall Street besides Druckenmiller. "Kevin Warsh would make a great chairman," JPMorgan Chase CEO Jamie Dimon said recently. And Wall Street analyst Meredith Whitney recently tweeted: "Congratulations to my friend, the highly intelligent and incredibly competent Kevin Warsh, on his well-deserved nomination to be the next Chair of the Federal Reserve."

But Warsh has his critics as well. Last year the former president of the Federal Reserve Bank of New York, Bill Dudley, wrote a piece entitled "Warsh Has a Fairy Tale View of Fed Rate Policy." Another high-profile Wall Street investor described Warsh as "a Powell contrarian who reverse-engineers arguments to fit his points." And a person in Warsh's social circle said, "I like Kevin, [but he] has his long history of being wrong, so I am concerned about our country's welfare were he to be Fed chair in a new crisis." A rebuttal to those criticisms might simply be to note Warsh's tenure at Druckenmiller's firm, as Druckenmiller is results-oriented and doesn't suffer fools gladly.

According to Duquesne's most recent 13F filing, Druckenmiller, who likes to take big concentrated bets within specific industries, owns some $4 billion of equities. As of last Sept. 30, his three biggest holdings were healthcare companies Natera, Insmed, and Teva Pharmaceutical Industries. He also owned sizable positions in Amazon.com, as well as Coupang, the "Amazon of South Korea," and MercadoLibre, the "Amazon of Latin America." (It's worth noting that Warsh serves on the board of Coupang, but will presumably resign if confirmed.) Be advised though, Druckenmiller is historically an active trader who disparages what he calls "lazy longs." "I've never hung on to a security if the reason I bought it has changed," he said in an interview.

Does Druckenmiller have any other protégés out there that we should be paying attention to? "I think they poached the last one," he says. "I don't think there's anybody else here that's about to get poached. Maybe the only one would be me, and I'm not poaching myself because I'm not fit for public office."

Being that guy behind the scenes seems to be role enough for Druckenmiller at this point.

Andrew Bary contributed to this article.

Write to Andy Serwer at andy.serwer@barrons.com and Matt Peterson at matt.peterson@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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Investing.com -- Alibaba announced Monday it will spend 3 billion yuan ($431 million) to attract users to its Qwen AI app during the upcoming Lunar New Year holiday, significantly escalating competition among China’s tech giants.

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Investing.com – Taiwan stocks were lower after the close on Monday, as losses in the , Glass and Plastic sectors led shares lower.

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