Seth Andrew Klarman (born May 21, 1957) is an American investor, hedge fund manager, and philanthropist. He is known as a value investor and is currently the chief executive and portfolio manager of the Baupost Group, a Boston-based private investment partnership he founded in 1982.
He closely follows the investment philosophy of Benjamin Graham and is known for buying unpopular assets while they are undervalued, seeking a margin of safety and profiting off of their rise in price. Since his fund’s $27 million-dollar inception to 2008 he has realized a 20 percent compound return-on-investment and as of 2016 manages $31 billion in assets.
In February 2017, Forbes Magazine listed his personal fortune at US$1.55 billion. In 2015, Klarman was listed as the 15th highest earning hedge fund manager in the world. In 2008, he was inducted into Institutional Investors Alpha’s Hedge Fund Manager Hall of Fame. He has drawn numerous comparisons to fellow value investor Warren Buffett, and akin to Buffett’s notation as the “Oracle of Omaha,” he is known as the “Oracle of Boston.”
Early life and education
Seth Andrew Klarman was born on May 21, 1957 in New York City. When he was six he moved to the Mt. Washington area of Baltimore, Maryland near the Pimlico Race Track, and grew up in a traditional Jewish family. His father was a public health economist at Johns Hopkins University and his mother taught high school English. His parents divorced shorty after their moving to Baltimore.
When he was four years old he redecorated his room to match a retail store putting price tags on all of his belongings and gave an oral presentation to his fifth grade class about the logistics of buying a stock. As he grew older had a variety of small time business ventures including a paper route, a snow cone stand, a snow shoveling business, and sold stamp-coin collections on the weekends. When he was 10 years old he purchased his first stock, one share of Johnson & Johnson (the stock split three-for-one and over time tripled his initial investment). At age 12 he was regularly calling his broker to get stock quotes, his reasoning behind buying a share of Johnson & Johnson was the fact that he has used a lot of band-aids (a product of the company) during his earlier years.
Klarman attended Cornell University in Ithaca, New York, and was interested in majoring in mathematics but instead chose to pursue economics. He graduated magna cum laude in economics with a minor in history in 1979. In the summer of his junior year he interned at the Mutual Shares fund and was introduced to Max Heine and Michael Price. After graduating from college he went back to the company to work for 18 months before deciding to go to business school. He went on to attend Harvard Business School where he was a Baker Scholar and was classmates with Jeffrey Immelt, Steve Burke, Stephen Mandel and Jamie Dimon.
Summary
| Seth Klarman | |
|---|---|
| Born | Seth Andrew Klarman May 21, 1957 New York City, New York, U.S. |
| Residence | Chestnut Hill, Massachusetts, U.S. |
| Nationality | American |
| Alma mater | Cornell University Harvard University |
| Occupation | Investor, hedge fund manager, and philanthropist |
| Known for | Founding and leading the Baupost Group |
| Net worth | US$1.55 billion (February 2017) |
| Spouse(s) | Beth Klarman (m. 1982) |
Klarman got his start in economics at Cornell University and, later, in the Harvard Business School. Klarman’s family history pointed him toward economics, as his father was a professor of public health economics at Johns Hopkins University in Baltimore. Immediately after his training, Klarman worked for the Mutual Shares fund, now known as part of the broader Franklin Templeton Investments group. In 1982, Klarman left to found Baupost Group in Boston.
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