Gerald Tsai

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Gerald Tsai Jr.
Born (1929-03-10)March 10, 1929
Shanghai
Died July 9, 2008(2008-07-09) (aged 79)[1]
New York City
Nationality United States
Education Wesleyan University (1947–48), Boston University (B.A., M.A. 1949)[2]
Occupation Investment management
Employer Primerica, Fidelity Investments
Known for Founder of Manhattan Fund

Gerald Tsai Jr. (蔡至勇 Cai Zhiyong, March 10, 1929 – July 9, 2008)[1][3] was an American financier and philanthropist who helped make Fidelity Investments into a mutual fund powerhouse.[4] Tsai pioneered the use of performance funds in money management during the 1950s and 1960s, and later turned a canning company into financial services giant Primerica.

After starting Fidelity Investments' first publicly sold aggressive growth fund in 1958, the Fidelity Capital Fund, he later founded the investment management firm the Manhattan Fund, an aggressive growth fund, in 1965. An early proponent of momentum investing, Tsai's specialty was concentrating his portfolios on narrow batches of glamour stocks, including Xerox and Polaroid Corporation, at a time when broad diversification was the prevailing wisdom.[5]

Early career[edit]

Tsai joined Fidelity Management and Research in 1952, and was named vice president in 1960.[6] By 1965, Tsai had sold his Fidelity stock and started the Manhattan Fund which won him widespread attention. When the fund first offered shares, a modest offering of 2.5 million shares quickly ballooned to a total of 27 million, bringing the fund $247 million in capital and representing what was at the time the biggest offering of an investment company. In 1968, he sold the fund for $27 million in stock to the CNA Financial Corporation, just as the fund's superior results were declining and as the bull market was starting to wane.[7] He remained with Tsai Management, the company he had founded to manage the Manhattan Fund, after the sale, and resigned in 1973.[8] In 1978, Tsai acquired a small insurance company, Associated Madison, for $2.2 million and sold it four years later to American Can Company for $162 million.[9]

Primerica[edit]

Tsai became Vice Chairman of American Can Company - a former component of the Dow Jones Industrial Average - in 1982.[10] Tsai later gained control of the company. American Can was a container production and food packaging business, and Tsai orchestrated its shift toward the more lucrative financial services sector. In 1997, Tsai purchased the financial firm Smith Barney for $475 million. By this time, the combined company had changed its name to Primerica to reflect its financial focus and Tsai was Chairman and Chief Executive Officer, making him the first Chinese-American to lead a Dow Jones Industrials company.[3] A year later, Primerica and Commercial Credit Group, headed by Sanford I. Weill were combined in a $1.65 billion deal. With 1.5 million shares, Tsai remained the largest shareholder and was named a director, while Weill ran the company.[11] Tsai received a golden parachute worth an estimated $40 million.[7]

Other business interests[edit]

Later in his life, Tsai re-entered the insurance industry, becoming Chief Executive Officer of the Delta Life Corporation.[12] In 1997, Tsai sold Delta Life to AmerUs Life Holdings for $185 million.[7] Tsai was on the Board of Directors of numerous companies including Apollo Investment Corporation, Rite Aid, Saks, United Rentals and Zenith Insurance Company.

Philanthropy[edit]

Tsai was actively involved in philanthropy through the Gerald Tsai Foundation.

Tsai was a trustee of Boston University from 1967 to 1977, and from 1988 to 2002. Tsai served as an honorary member of the board until his death.[13] The Tsai family donated $7.5 million to the university to establish the Tsai Performance Center and Tsai Fitness Center.[14]

Tsai served on the Board of Trustees of the School of Medicine Foundation Board and the NYU Langone Medical Center, where he established the Gerald Tsai Transplantation Unit. Tsai also served on the Board of Trustees of the Norton Museum of Art and was a member of the Board of Overseers of the Wharton School of the University of Pennsylvania.[15]

Personal life[edit]

Tsai was married four times. In 2006, Tsai was engaged to Sharon Bush, the former wife of President George W. Bush's brother, Neil Bush.[3] The marriage was called off in 2008 after a high-profile breakup that resulted in a legal battle over an 11-carat-canary-diamond ring that Tsai gave to Ms. Bush and demanded back.[16][17][18] The New York Times and CBS News reported that the investor sued Ms. Bush in Manhattan Supreme Court after she refused to return the ring.[16][17]

Death[edit]

Christopher Tsai, a hedge fund manager and president of Tsai Capital, said his father died in Manhattan of multiple organ failure on July 9, 2008.[1] Besides Christopher, he is survived by two other children.[3]

References[edit]

  1. ^ a b c "Virtuoso investor Gerald Tsai Jr. dies". UPI. 2008-07-11. Retrieved 2010-08-24. 
  2. ^ http://www.mfwire.com/common/artprint2007.asp?storyID=18787&wireid=2
  3. ^ a b c d Stelter, Brian (2008-07-11). "Gerald Tsai, Innovative Investor, Dies at 79". New York Times. Retrieved 2010-08-23. 
  4. ^ [1] Forbes, "Jerry Tsai's Smart Timing", January 10, 2000
  5. ^ Charles D. Ellis, James R. Vertin. Wall Street People: True Stories of Today's Masters and Moguls. John Wiley and Sons, 2001, (pp. 159-162), ISBN 0-471-23809-0
  6. ^ "Fund Officer Elevated". New York Times. 1960-06-01. p. 55. 
  7. ^ a b c Jerry Tsai's Smart Timing, Forbes
  8. ^ "Tsai Resigns as Fund Manager". New York Times. 1973-01-30. p. 45. 
  9. ^ [2]
  10. ^ Lueck, Thomas J. (1984-05-08). "American Can's Revamping". New York Times. p. D1. 
  11. ^ Cole, Robert J. (1988-08-30). "Leading Financiers Will Merge Companies in $1.65 Billion Deal". New York Times. Retrieved 2010-08-23. 
  12. ^ Monica Langley. Tearing Down the Walls: How Sandy Weill Fought His Way to the Top of the Financial World. Simon and Schuster, 2004, (pp. 159-162), ISBN 0-7432-4726-4]
  13. ^ BU Today
  14. ^ BU Today
  15. ^ [3]
  16. ^ a b If Things Fall Apart, Who Gets the Ring? The New York Times, October 3, 2008
  17. ^ a b Bush Ex-Kin in Tug-of-War Over Giant Ring CBS News, February 11, 2009
  18. ^ Sharon Bush Gives Gerald Tsai a Few Reasons Not to Pine for Her, New York Magazine, February 26, 2008

External links[edit]