Seth Klarman

Klarman was born on May 21, 1957, in New York City from a Jewish family. His father, Herbert E. Klarman, was a public health economist at Johns Hopkins University and his mother was a psychiatric social worker His parents divorced shortly 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, he 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). His reasoning behind buying a share of Johnson & Johnson was that he had used a lot of band-aids (a product of the company) during his earlier years. At age 12 he was regularly calling his broker to get stock quotes. == Education ==

Klarman attended Cornell University in Ithaca, New York, and was interested in majoring in mathematics but instead chose to pursue economics. He was a member of the Delta Chi fraternity. 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. == Career ==

Investment After graduating from business school in 1982, he founded the Baupost Group with Harvard Professor William J. Poorvu and partners Howard H. Stevenson, Jordan Baruch and Isaac Auerbach. The name is an acronym based on the founders' names (the name was decided on before Klarman joined the project). and he later recalled that the other founders "were taking a big risk on a relatively inexperienced person." In 2020 Seth Klarman's largest holding is eBay with a value of US$1.48 billion. Investment philosophy Klarman is a known proponent of value investing, and has stated that he has known he was one since junior year of college at age 25. During an interview at Harvard Business School, he stated: "It turns out that value investing is something that is in your blood. There are people who just don't have the patience and discipline to do it, and there are people who do. So it leads me to think it's genetic." Despite his unconventional strategies, he has consistently achieved high returns. Klarman looks for companies that are traded at a discount (so he can assume shares with a margin of safety). Klarman and his fund usually go "bargain hunting," when companies are distressed or face low growth or declining years. In 2015, when energy stocks were declining, his firm "started looking for deals." According to Institutional Investor, "[Klarman] has succeeded by deftly exploiting under-valued markets whether they are in equities, junk bonds, bankruptcies, foreign bonds or real estate." Horse racing Klarman owns Klaravich Stables Inc. and has been racing horses with William Lawrence since 2006. Their horse, Cloud Computing, won the 2017 Preakness Stakes. In 2019, Klarman and Lawrence won the Outstanding Owner category at the Eclipse Awards, mainly due to the incredible season for their horse Bricks and Mortar. In 2022 the stable won the Preakness Stakes on Seth Klarman's 65th birthday with their lightly raced horse Early Voting. == Personal life ==

Klarman typically keeps a low profile, rarely speaking in public or granting interviews. He lives in Chestnut Hill, Massachusetts, with his wife, Beth Schultz Klarman, whom he met on a Boston Harbor cruise in 1982; they have three children. His brother, Michael Klarman, is a professor at Harvard Law School. == Political and economic views ==

Klarman has donated to both Democratic and Republican groups and candidates while being registered an independent voter. Since the election of Donald Trump in 2016, he has donated almost exclusively to Democrats. He has also given extensively to philanthropic causes through the Klarman Family Foundation, which he runs with his wife. The foundation has $700 million in assets as of 2018 and gave away $40 million in 2016. It focuses on pro-democracy initiatives, such as supporting groups that protect journalists, fight against bigotry, and advocate for LGBTQ rights. and the pro-same-sex marriage American Unity Fund. He has stated: "I'm a complicated guy, I'm fairly nuanced in my views. I'm trying to do what I think is the right thing for the country." In the 2016 presidential election, he gave the maximum donation of $5,400 to Hillary Clinton's campaign, stating that "Donald Trump is completely unqualified for the highest office in the land." The letter states: Exuberant investors have focused on the potential benefits of stimulative tax cuts, while mostly ignoring the risks from America-first protectionism and the erection of new trade barriers. President Trump may be able to temporarily hold off the sweep of automation and globalization by cajoling companies to keep jobs at home, but bolstering inefficient and uncompetitive enterprises is likely to only temporarily stave off market forces. Although Klarman gave $2.9 million to Republican candidates in 2016, he told The New York Times in September 2018, "One of the reasons I’m willing to come out of my shell and talk to you is because I think democracy is at stake, and maybe I’ll be able to convince some other people of that, and get them to support Democrats in 2018." Klarman, who was previously one of the biggest donors to the Republican Party in New England, told the Times in September 2018, that he had already contributed almost $5 million to nearly 150 candidates, including Representative Joe Kennedy III, Senate candidate Representative Beto O'Rourke and Senator Kirsten Gillibrand. Klarman is a registered Independent who reasoned, "We need to turn the House and Senate as a check on Donald Trump and his runaway presidency." He commented that he feels "betrayed" by "spineless" Republicans who have been "profiles in cowardice," and believes the only option is to "act as a check and balance." Klarman along with investor and Hyatt heir John Pritzker and LinkedIn cofounder Reid Hoffman were among the donors to the anti-Trump Republican Accountability Project. According to Dennis C. Jett, "Klarman contributes to the Foundation for the Defense of Democracies, the Middle East Media Research Institute, the Middle East Forum, and the David Project. Klarman, believing the coverage of Israel in Israeli newspapers was biased, started his own called Times of Israel," of which he is chairman. ==Wealth==

Forbes lists his personal fortune at US$1.3 billion . In 2017, he was listed as the 15th highest earning hedge fund manager in the world. ==Philanthropy==

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 antisemitism and bigotry. In 2013, Klarman donated the lead capital to fund the $61 million building at Cornell University named the Seth '79 and Beth Klarman Humanities Building, more simply known as Klarman Hall. A year later, he donated money to Harvard Business School to construct a "conference center/auditorium and performance space," named Klarman Hall. It opened in 2018. In 2019, Cornell University announced that Klarman had donated significant funds to help establish a new postdoctoral fellowship program at the school, the Klarman Fellowships. ==Awards==

Klarman has been called a "hedge fund titan," for his slow accumulation of fund capital over his career (in 2008, his hedge fund was the 6th largest in the world) and low profile. He is sometimes called "the Warren Buffett of his generation," == Publications and works ==

Klarman has written many annual letters to shareholders but has kept a limited role in writing articles, op-eds or books. In 1991, Klarman published his only book, Margin of Safety: Risk Averse Investing Strategies for the Thoughtful Investor (1991), a reflection of value investing found in his hedge fund. In the book, he outlines the various issues with retail investing, and critiques small time investors getting into the market purely using metrics such as share price momentum and losing money in the long run. He issues that this is speculation and at times gambling and should be discouraged in the marketplace. The book asserts that more people should follow the principles of value investing or people who invest in stocks that trade below their underlying value so as to purchase them at a discount. The book had amassed a cult following. Due to "only 5,000 copies [being sold]," the book is out of print and has become a relic in the finance community. Originally the book was priced at $25 a copy, however, due to it being out of print, it has a market price of $700 for used versions with newer copies going for $2,500 to $4,000. == See also ==