Billionaire and head of Boston-based hedge fund Baupost Group Seth Klarman is a bit of an enigma in the investing world. Unlike some of his peers, Klarman typically prefers to conduct his business without making prominent statements on the business news circuit. Nonetheless, Klarman is widely respected in the field for his savvy investment decisions, a reputation which has only grown as Baupost Group has become one of the strongest and largest hedge funds in the industry, managing an estimated $27 billion in assets.
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.
Rise of Baupost
In more than three decades, Baupost has grown to become a major player in the U.S. hedge fund world. Klarman's investment strategy is unique, and he tends to be considered a highly conservative investor by his peers. It is likely that this reputation is strengthened by Baupost's large cash holdings, sometimes totaling more than half of the fund's assets. Klarman often looks for value in underappreciated stocks and puts his assets into areas in which other investors would not consider. However, Baupost has posted consistently impressive returns throughout its history, proving that Klarman's innovative approach to investing is a successful one, even if it is hard to predict or to duplicate.
Klarman himself has garnered a reputation as being one of the brightest minds in the investment world. A follower of Warren Buffett, Klarman himself has been called the "Oracle of Boston" for his savviness. Warren Buffett, notoriously tight-lipped about other investors, has heaped praise on Klarman for his work with Baupost. Klarman has also become known for his deep philanthropic interests as well. His Klarman Family Foundation makes regular and substantial donations to a variety of causes, including medicine, Jewish interest organizations, and pro-Israel support groups. Klarman himself is an active supporter of Israel, working with the Israel Project and a variety of related organizations. Beyond, Klarman is an active donor for Republican campaigns, although he has recently revealed that in the 2016 presidential election he backed Hillary Clinton over Donald Trump.
While Seth Klarman may be an investor that many outside of the financial world haven't heard of, those within certainly have. His book Margin of Safety routinely sells for hundreds of dollars or more on Amazon. Klarman and Baupost will likely continue to make impressive moves, whether or not the rest of the world realizes.