In what is seen as a notable change in strategy just months after it purchased stakes, Soros Fund Management divested its stake in JC Penney and reduced its holdings of Herbalife late in 2013, Reuters reported.

The New York-based hedge fund which is seen as one of the closely-watched investors in the industry and the second largest investor of JC Penny, sold 19.98 million shares in the last quarter of last year, a regulatory filing showed. Soros Fund Management also trimmed its holdings in Herbalife where it ranked as the fifth largest investor, the report said.

JC Penney and Herbalife made the headlines last year. Retailer JC Penney's stock price plunged to half its value when a grand plan to revamp the company failed. Nutrition and weight loss firm Herbalife, on the other hand, surged 139% after a dramatic faceoff occurred between the largest investors in the world, the report said.

The investment of Soros in both firms bolstered their share prices and increased their credibility quotients, perhaps even luring other hedge funds to invest in them. Historically, Soros is known for the profits he makes on savvy bets. Since George Soros founded the firm 40 years ago, industry data showed that it has already earned $40 billion for its investors. This includes last year's earnings of $5.5 billion. The company now invests only the personal fortune of Soros but its decisions are still being closely monitored, the report said.

Soros was a regular supporter of JC Penney until the end of the third quarter but apparently changed its mind in the final months of last year. Other hedge managers also divested their shares in the retailer. Richard Perry exited its 10 million shares while Kyle Bass's Hayman Capital also sold 5.6 million shares. David Tepper's Appaloosa Management liquidated all of the 737,800 shares it held in the retailer, the report said.