Seth Klarman

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Seth Klarman
Born (1957-05-21) May 21, 1957 (age 56)
New York City
Nationality United States
Ethnicity Jewish
Alma mater Cornell University
Harvard Business School
Occupation Hedge Fund Manager
Known for Founder of the Baupost Group
Net worth Increase US$1.05 billion (March 2013)[1]
Spouse(s) Beth Klarman

Seth Klarman (born May 21, 1957)[2][3] is an American billionaire who founded the Baupost Group, a Boston-based private investment partnership, and the author of a book on value investing titled Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor.

Early life and education[edit]

Klarman grew up in a Jewish[4][5] family in Baltimore, where his father was a public health economist at Johns Hopkins University and his mother taught high school English.[6]

Klarman is a graduate of Cornell University and Harvard Business School[7] where he was a Baker Scholar and was classmates with Jeffrey Immelt, Steve Burke, Stephen Mandel (hedge fund manager) and Jamie Dimon. At Cornell, he was a member of the Delta Chi fraternity, where he commonly studied while watching TV in the fraternity library/TV room. Despite this unorthodox study style, he achieved Phi Beta Kappa.[citation needed]

Career[edit]

Before founding Baupost, Klarman worked for Max Heine and Michael Price of the Mutual Shares fund (now a part of Franklin Templeton Investments). He founded the Baupost Group in 1982, which managed USD 22 Billion as of 2010.[8] Despite his unconventional strategies, he has consistently achieved high returns.[9] He is a very conservative investor, and often holds a significant amounts of cash in his investment portfolios, sometimes in excess of 50% of the total.[10] He often makes unusual investments, buying unpopular assets while they are undervalued, using complex derivatives, and buying put options. Klarman typically keeps a low profile, rarely speaking in public or granting interviews. However, in 2006, he spoke pessimistically about the stock market and warned of future inflation.[11] He is sometimes referred to as "the Warren Buffett of his generation"[12]

In 1991, Klarman authored Margin of Safety, Risk Averse Investing Strategies for the Thoughtful Investor, which since has become a value investing classic. Now out of print, Margin of Safety has sold on Amazon for $1,200 and eBay for $2,000.[13]

In 2014 Forbes listed Seth Klarman as one of the 25 Highest-Earning hedge fund managers in 2013. His 2013 total earnings was $350 millions ranks him the 20th among the 25 top earning hedge fund managers. [14]

Philanthropy[edit]

Klarman started The Klarman Family Foundation ($255 million in assets as of 2010) which donates to medical causes, Jewish organizations (such as the American Jewish Committee, Boston’s Combined Jewish Philanthropies and Gann Academy), and Israeli causes. Klarman is the chairman of Facing History and Ourselves which develops classroom programs to combat anti-Semitism and bigotry.[4] Klarman also is active with the The Israel Project, a pro-Israel advocacy group that collects and provides information on Israel for journalists. He gave the organization $4 million between 2008 and 2010.[4]

Personal[edit]

Klarman is married to Beth Klarman.[4] Klarman is the older brother of Harvard Law Professor Michael Klarman.[citation needed]

Klarman is the key U.S. investor behind The Times of Israel, an online English-language newspaper which reports on Israel, the region and the Jewish world.[15][16]

References[edit]

  1. ^ Forbes: The World's Billionaires: Seth Klarman
  2. ^ http://archive.breederscup.com/bio.aspx?id=27293
  3. ^ The Oracle of Boston; Seth Klarman. The Economist (US) July 7, 2012
  4. ^ a b c d Jewish Daily Forward: "The Softspoken Man Behind Times of Israel - Famed Investor Seth Klarman Says Site Won't Pull Punches" By Josh Nathan-Kazis February 29, 2012
  5. ^ Forbes Israel: Jewish Billionaires - Profile of Seth Klarman April 14, 2013 (in Hebrew)
  6. ^ Scott Cendrowski (February 15, 2012). "A hedge fund bets big on a Canadian mega quarry". CNN Money. Retrieved 2012-02-15. 
  7. ^ Fabrikant, Geraldine. (2007, May 13). Manager Frets Over the Market, but Still Outdoes It. New York Times, Investment section. Accessed on 10-25-2008.
  8. ^ Opportunities for Patient Investors, Financial Analysts Journal, Volume 66, Number 5, Seth A. Klarman and Jason Zweig
  9. ^ Baupost's Klarman sees poor outlook for stocks Reuters, Aaron Pressman and Matthew Lewis. May 18, 2010
  10. ^ The Wharton Journal 12/5/05
  11. ^ Brett Arends (May 19, 2010). "Klarman: Why Investing Is Like Chess". Wall Street Journal. 
  12. ^ The Oracle of Boston, Economist
  13. ^ The $700 Used Book. (2006, Aug. 7). BusinessWeek, Personal Finance section. Accessed 11-11-2008.
  14. ^ Vardi, Nathan (Feb 26, 2014), "The 25 Highest-Earning Hedge Fund Managers And Traders", Forbes 
  15. ^ http://blogs.timesofisrael.com/a-note-from-the-chairman/
  16. ^ Nathan-Kazis, Josh (29 February 2012). "The Softspoken Man Behind Times of Israel". The Forward. Retrieved 17 March 2012. 

Further reading[edit]

  • [1] Notes from Seth Klarman's discussion at the CFA Institute's 2010 Annual Conference - May 18, 2010
  • Klarman, Seth (2007). Remarks at MIT (PDF). Website of Redfield, Blonsky & Co., LLC. Accessed 11-11-2008.
  • [2] Seth Klarman interview by Alpha
  • [3] Excerpts from 2005 Baupost Group Letter
  • [4] Seth Klarman video conference at Ben Graham Center for Value Investing
  • [5] Seth Klarman featured in Outstanding Investor's Digest March 2009
  • [6] Seth Klarman guest lecture at Harvard's Psychology of Leadership course - May 1, 2006

External links[edit]