David Tepper - one of the largest American investors, founder of hedging company Appaloosa Management, which specializes in failing businesses, on investments in "junk" bonds and company shares, undervalued by the market. Today he is one of the richest Americans. Forbes magazine estimates the general condition of the investor in $10 billion. According to Forbes, he was ranked 258th among the richest people in the world.
2013 G. for Wall Street turned out to be difficult, despite the stock market boom. But for the stock "bull" David Tepper this year was very successful.. Managed by his hedge fund Appaloosa Management - $20 billion, and the fund's gross income last year was 40%. He took a risk to bet on American securities and made good money on airline stocks. IN 2013 G. David has invested heavily in airline stocks: American Airlines Group, Delta Air Lines и United Continental Holdings.
Appaloosa Management celebrated its 20th anniversary. Its average annual income since its inception was 28,44%. With this record, Tepper can be considered one of the best hedge fund directors in history..
Tepper creates a new standard for hedge fund managers. It has demonstrated phenomenal return on investment for a long time., but the professional skills of the investor were especially vividly manifested after the crisis. IN 2013 G. 56-year-old founder of Appaloosa Management has surpassed the results of the American stock market and most of his peers, since his fund has reported profits, Exceeding 42%.
Over the past five years, Tepper's hedge fund has generated almost 40%, and gross - 50%. At the end of the year, he compensated investors for part of the money - this has already become a tradition at Appaloosa. Only in 2013 G. Tepper earned $3,5 billion.
Biography and education
Born David in 1957 G. in Pittsburgh (Pennsylvania) in a Jewish family. His father was an accountant, and mother - a teacher in primary school. As a child, the boy showed a talent for mathematics. Truth, academic performance was satisfactory and nothing more. And at school, David established himself as a bully and a fighter, was fond of collecting baseball cards, managing to keep all sports statistics in mind. He still surprises his analysts today with an almost photographic memory..
Trained by Tepper at the University of Pittsburgh and Mallon University, giving in to study completely and getting excellent grades. To pay for an expensive education, David had to work part-time in the library of fine arts and take out loans.
The teachers guessed in him the makings of a talented entrepreneur and tried to help in the implementation of ambitious undertakings.
Yet, being a student, he traded on the stock exchange. Started in the market with scalping options. Trade brought stable income. He started earning enough, to pay education and hostel ($2500 for the semester).
After graduating, David Tepper holds a BA in Economics.
First steps in business
David Tepper started his career as a junior analyst at the financial company Equibank. But such work did not bring satisfaction to the ambitious Tepper., and in 1980 he entered Carnegie Mellon University Business School.
IN 1982 G. earned an MBA and joined the treasury of Ohio Republic Steel. Here he first learned about "junk" bonds and gained practical experience in the bankruptcy process..
Then David got a job as a credit analyst at Keyston mutual fund. (Keystone Mutual Funds) in boston. And in 1985 G. moved to Goldman Sachs as a credit analyst with a salary $150 thousand. in year. Six months later, he moved to the trading floor, to the department of trading high yield bonds.
By the end 1986 G. he became the head of this department (head of junk bond trading). Truth, neglect of the bank's corporate policy led to, that his career has stalled.
IN 1992 G. David left the bank and, together with former colleague Jack Walt, created his own foundation - Appaloosa. At that time, only $57 million. But a year later, the fund's assets reached $300 million, and at the end 1996 G. — $800 million. June 1993 to September 2009 G. the return on investment of Appaloosa Investment was, average, 38%.
The financier decided to focus on companies and countries, in financial difficulties. So, in 1995 G. he bought the debts of the Argentine government, on what earned 42%.
IN 1997 G. - bought a Korean won, which fell after the Asian crisis by 50%. On this deal, his fund grew by 29,5%.
Truth, in 1998 G. he bet unsuccessfully, that Russia will not default on its obligations, and was wrong. Fund lost 29,2%. However, David continued to buy up Russian debts after the default.. IN 1999 G. the fund grew by 60,9%.
2002-2003. Tepper was making money, buying debts of housing and communal services enterprises. IN 2003 G. his fund showed the best performance in its history - 148,8%.
During 2009 G. investments in financial companies peaked - 30% Appallosa fund assets.
Tepper also bought shares in banks. He invested in Bank of America, Citigroup, Fifth Third Bancorp и SunTrust Bank Inc. In September 2009 G. Bank of America shares rose by 330%, and Citigroup - on 223%.
Appaloosa Fund Performance 2009 G. amounted to 120%, which became the maximum return among hedge funds with assets of more than $1 billion.
IN 2011 G. Tepper's company, like all other hedge funds, experienced a drop in financial performance. On average, similar funds suffered a loss in 5%. Appaloosa Management was no exception - the fund's losses amounted to 5,09%. But already in February 2012 G. David Announces Quarterly Profit. He sold his stakes in Bank of America companies, Yahoo, HP и Pfizer.
IN 2012 G. Tepper became the most successful hedge fundraiser, Earning $2,2 billion.
Personal life
Despite astronomical gains, David Tepper leads a relatively modest lifestyle. He lives with his wife Marlene in a spacious modern house.. His children have graduated or are still studying in public schools. His children graduated from public schools or are still studying in them. He is personally involved in raising children - stimulates their passion for baseball, softball, football and other sports.
Tepper recently remodeled his home, since the previous view from the windows of numerous rooms did not give the desired view of the ocean coast. Analysts found, that the estimated value of the house is about $60 million. This is a three-hectare estate with ocean views in New York State.
Charity
Recently, David Tepper has also become known for his charitable activities.. He is a renowned philanthropist and provides charitable assistance to various educational institutions.. IN 2003 G. he donated to Mellon School $55 million. It was even decided to change the name of the school in honor of David Tepper..
Marking the twentieth anniversary, his foundation promised to donate $20 million for charity. Besides, last year David awarded a grant to $67 million to Carnegie Mellon University - in addition to $55 million, previously provided, and also continued to support a number of other educational programs.
He also funds charitable kitchens for the poor in his home state of New Jersey.. Donated $7 million to the food bank and a significant amount to the MetroWest Jewish community.
After Hurricane Sandy, which raged in the USA last year, he donated funds to the victims of the storm.
Philosophy of investment strategy
Tepper's investment strategy - investing in debt securities of issuers, facing financial difficulties. The philosophy of such a strategy is to buy assets much cheaper than their real value..
However, Tepper doesn’t just dwell on the debts of companies., investing across the full spectrum of capital structure: from non-market and bank loans of companies and preferred shares to ordinary shares. Investing in junk assets is not for the faint of heart. Investing in assets shunned by everyone, the manager finds himself alone against the whole market.
Here are the principles, which a successful financier is guided by:
• Our competitive advantage - in-depth analysis, we are not afraid to act according to our beliefs. We are often the first players in a country or a situation.
• Never listen to annoying investors. The manager should make good bets.
• The best time to invest in us is when we fall. We are not afraid of a decline in the prices of our assets, because we did a good analysis. Others are too afraid to lose, therefore they cannot earn.
• You have an advantage, if you manage a fund in $10 billion, but if there is even more money, it is difficult to manage such a fund.
• We set a time limit for withdrawal of funds up to 3 years, to attract long-term money, not hot money.
• Our investment is like a puzzle game, the meaning of which is in the connection of dots and which never ends, and the prize in it is billions of dollars.
• In Argentina, we came to the conclusion, what to look at bank deposits. This was the correct variable, where we focused our attention.
• IN 1998 G. in Russia our biggest mistake was, what we underestimated, how quickly the market can become illiquid.
Tepper constantly “replays” mistakes in his head., to draw the correct conclusions and draws them.
