The global financial crisis will reduce the hedge-fund industry to as little as a third of its current size, billionaire investor George Soros said on Tuesday.

"The hedge-fund industry is going to move through a shakeout," Soros, 78, one of the world's first hedge-fund managers and still among the best known, said on Tuesday in a speech at the Massachusetts Institute of Technology.

"In my estimation (the industry) will be reduced in size by anywhere between half and two thirds," he said. He did not specify if he was talking about the number of funds or the amount of money invested in them.