Soros Private Equity to Rescue Bluefly

George Soros, who overhauled his hedge fund group this year to cut risky investments, will spend up to $15 million to rescue Bluefly Inc. in exchange for control of the Web retailer. The $2.7-billion Soros Private Equity Partners, which owned about a fifth of Bluefly, said it will buy $5 million of preferred stock and up to $10 million of common stock, raising its stake to as much as 60%. Soros’ fund firm first bought preferred shares of Bluefly in July 1999, with a group that included Peter Lynch, former manager of Fidelity Investment’s Magellan Fund. Common shares were trading at $10.13, and have since tumbled 71%. Shares in Bluefly, which sells apparel from top designers, closed up 22 cents at $2.97 on Nasdaq.