Seth Klarman – founder of Baupost Group
Seth Klarman is a well-known personality in investment circles. He has a billion-dollar fortune and is the founder of the Baupost Group. The businessman has created a successful career, the secrets of which he shares with the readers of his book. Seth’s biography is full of interesting twists and turns.
The American investor was born in 1957 in a Jewish family in New York. His childhood took place in Baltimore, where his father worked at Johns Hopkins University, studying economics in health care, and his mother taught English at school. After school, Klarman entered Cornell University, where he was also a member of the Delta Chi fraternity and became a member of the Phi Beta Kappa Society, which was considered extremely honorable, the organization took into its ranks only the best students of American universities. Later, Seth graduated from Harvard Business School, where he studied with the directors of General Electric and NBCUniversal corporations and many other famous businessmen.
Before starting his own firm, Klarman worked for the Mutual Shares investment fund. Having gained the necessary experience, he decided to start his own business. In 1982, Seth established the Baupost Group. Thanks to prudent management and a well-thought-out strategy, the company was actively developing and expanding. In 2010, the company was managed by 22 billion dollars, and only 2 years later the capital was 29.4% billion dollars.
Seth Klarman has a non-standard approach to investment activity, which, however, works unsuccessfully. During the whole period of his professional activity the businessman had only two years, when the company’s income fell to negative values – in 1998 and 2008. This result is extremely successful for hedge management.
Klarman is one of those entrepreneurs who have conservative views on doing business. A large share of his investment portfolio is cash, sometimes it reaches more than 50 percent of the total volume of all instruments. However, Seth also likes to acquire unpopular assets at a time when they are undervalued by other investors. To do this, he uses various derivatives and buys put options.
Klarman is not a public person, he does not like to give interviews, does not like to hold photo sessions and press conferences. However, if he speaks, his words are always listened to. This was the case in 2006, when an investor warned about inflation and the collapse of the stock market.
Seth’s book, published in 1991, became a classic for the investment world. The price of a copy on eBay ranges from 1200 to 2000 dollars.
In addition to the investment business, Klarman is engaged in charity through a personal foundation, The Klarman Family Foundation.