Richard Rainwater

Richard E. Rainwater (born 1943) is an American investor and fund manager.

Biography

Early life

The son of a wholesale grocer, he grew up in Fort Worth, Texas. He graduated from the University of Texas with a degree in mathematics, where he was a member of the Tau chapter of the Kappa Sigma fraternity. He was recognized by the national organization in 1996 as Kappa Sigma Man of the Year. He then went on to earn his MBA from Stanford Business School.

Career

After business school, Rainwater landed a job as an investment banker, but soon accepted an invitation from former Stanford classmate Sid Bass to manage and diversify the Bass family portfolio. Rainwater became the chief financial architect for the Bass family investments. He was given $5 million to invest during his first year and managed to lose it all. Rainwater then sought a more methodical investment strategy by speaking to investors like Warren Buffett and Charles Allen, Jr., while also studying the work of Benjamin Graham and David Dodd. After that debacle, Rainwater sought advice on more qualitative investing and his investments began to take off, according to "Wall Street's Best-kept Secret," a cover story that appeared in the October 20, 1986 issue of Business Week. Rainwater eventually transformed the Bass family fortune into $5 billion. He is reported to have amassed $100 million for himself during that period, which he later used as seed money for his own fund.

Rainwater has been an independent investor since 1986, investing in more than 30 companies and purchasing 15,000,000 square feet (1,400,000 m²) of office space in Texas. Fortune magazine described his investing style as "analytically rigorous but opportunistic and Texas-sized in its audacity."

He founded or co-founded firms including ENSCO International, an oil field service and offshore drilling company, in 1986; Columbia Hospital Corporation in 1988; Mid Ocean Limited, a provider of casualty re-insurance, in 1992; and Crescent Real Estate Equities, Inc. in 1994. He has been called a "capitalist cowboy for the '90s, leading the way into new frontiers of finance."

Betting on peak oil

Beginning in the late 1990s, when petroleum prices were near historic inflation-adjusted lows, Rainwater began taking long positions on petroleum futures. He was influenced by reading Beyond the Limits, the sequel to Limits to Growth. Over the following years, Rainwater read further about peak oil, including books such as The Long Emergency by James Kunstler and online discussions. Rainwater took positions in financial markets that effectively amounted to betting with peakniks and malthusians against cornucopians, somewhat like a reprise of the famous Simon–Ehrlich wager, except on a much larger scale. The oil price increases since 2003 have made these bets pay off handsomely for Rainwater.

While remaining guardedly optimistic against the worst-case scenario predictions of doomers, Rainwater sees the peak oil phenomenon as a grave threat and seeks to call attention to it.

Personal life

With an estimated current net worth of around $2.3 billion, He is ranked by Forbes as the 171st richest person in the United States and the 512th richest person in the world. He is married to financier Darla Moore. In 2009 he was diagnosed with progressive supranuclear palsy.

External links

• "Classmates Heap Praise on Rainwater," Stanford Graduate School of Business
• Forbes 2006 ranking
• "Sitting Pretty," Fortune, June 11, 2001
• "Midas Touch Was Billionaire's Gift to Bush," The New York Times, October 30, 1999
• Stanford University - prominent alumni page
• "Will the Oil Bubble Burst?" Time, June 5, 2008
• "Rainwater's Oil Bet," Time magazine, 2008
• "Time to bet on an oil crunch," Fortune, October 1, 2008
• "Rainwater's Single Worst Investment," BusinessWeek, March 14, 2008
• "Richard Rainwater: The invisible man behind one of the year’s biggest deals," Texas Monthly, September 1996