David Tepper: American Billionaire Provides Grand-Slam Returns
Some have contended that he’s the greatest hedge fund manager of his generation; others are more measured in their praise, noting that he’s been steadily returning money to his clients for years. Either way, it’s impossible to dispute David Tepper’s stature as a leader among billionaire investors in America.
As the owner of the National Football League’s Carolina Panthers, David Tepper gets to enjoy his passion for sports, but as the Founder and President of Appaloosa Management, he gets to pursue his lifelong interest in finance. Established in 1993 by David Tepper and Jack Walton, Appaloosa Management is a Miami Beach, Florida-based hedge fund firm that currently manages $17 billion in assets.
Specializing in stocks and bonds of distressed companies, Appaloosa Management has averaged 30% annual returns – a stunning performance by any standard. Yield varies by year, but with 67% returns in 2001, 149% returns in 2003, and 117.3% returns in 2009, long-term investors shouldn’t be too bothered by variations in performance.
The path to becoming one of the world’s most successful hedge-fund managers began in a lower middle class neighborhood in Pittsburgh, Pennsylvania, where David Alan Tepper was born on September 11, 1957. The middle of three children, David is the son of an accountant and a public school teacher, and he amazed his parents when they discovered that he could do multiplication and complex addition at age 4.
Fast-forward to his college years, and we see that David Tepper earned his bachelor’s degree in economics from the University of Pittsburgh in 1978, as well as an MBA from Carnegie Mellon University in 1982. Years later, in 2013, Mr. Tepper donated a gift of $67 million to Carnegie Mellon, whose Tepper School of Business is named after him.
Hired by Goldman Sachs as a credit analyst in 1986, David quickly became the head of the high-yield desk but eventually left to launch Appaloosa Management in 1993. An opportunistic investor with a contrarian view, David Tepper and Appaloosa Management don’t shy away from risky bets, such as when the firm purchased distressed debt in Enron, World Com and Conseco, three of the largest bankruptcies at the time.
Bets like these might seem too speculative for most investors, but to a large extent, they’ve been the source of David Tepper and Appaloosa Management’s grand-slam returns over the years. Now worth $11.6 billion, Mr. Tepper continues to make headlines, such as when he bought the Carolina Panthers for $2.3 billion in July of 2018.
At age 61, David Tepper has plenty of years ahead of him to make waves in finance and elsewhere. Granted, his investing methodology isn’t suited for everyone, but with such spectacular returns and as the third-highest-earning hedge-fund manager of 2018, there’s no sign of Mr. Tepper slowing down or changing his consistently winning formula for financial success.