Seth Klarman

Seth Andrew Klarman was born on May 21, 1957, in New York City to a Jewish family. At the age of six, he moved to the Mt. Washington area of Baltimore, Maryland, near Pimlico Race Course. His father was a public health economist at Johns Hopkins University, while his mother was a psychiatric social worker. Unfortunately, his parents divorced shortly after the move to Baltimore.

From a young age, Klarman displayed a keen interest in business. He engaged in various small-time ventures, including a paper route, a snow cone stand, a snow shoveling business, and selling stamp-coin collections. His fascination with the stock market began at the age of 10 when he purchased his first stock, a single share of Johnson & Johnson. By the age of 12, he was regularly calling his broker to obtain stock quotes.

Klarman attended Cornell University in Ithaca, New York, where he initially pursued mathematics but later switched to economics. He graduated magna cum laude in economics with a minor in history in 1979. During his time at Cornell, he was a member of the Delta Chi fraternity.

During his junior year, Klarman interned at the Mutual Shares fund, where he was introduced to Max Heine and Michael Price. After graduating, he worked at Mutual Shares for 18 months before deciding to pursue an MBA.

Klarman then attended Harvard Business School, where he was a Baker Scholar. Among his classmates were notable figures such as Jeffrey Immelt, Steve Burke, Stephen Mandel, James Long, and Jamie Dimon.

In 1982, Klarman co-founded the Baupost Group with Harvard Professor William J. Poorvu and partners Howard H. Stevenson, Jordan Baruch, and Isaac Auerbach. Despite receiving a starting salary of $35,000 per year, which was considered low compared to alternative job offers, Klarman was determined to pursue his passion for investing.

Early on, Klarman engaged in detailed discussions with Goldman Sachs salesmen, who eventually became hesitant to answer his calls due to his probing questions and deep understanding of the market.

Klarman is a staunch proponent of value investing, believing that it is ingrained in his DNA.

He emphasizes the importance of patience, discipline, and avoiding the "this-time-is-different" mindset. Klarman stresses the significance of business cycles and their self-corrective nature.

To mitigate risk, Klarman maintains a substantial portion of his funds in cash, allowing him to capitalize on favorable market conditions. He is known for making unusual investments, including unpopular assets, complex derivatives, and put options. His investment strategy focuses on companies trading at a discount with a margin of safety, seeking "bargain hunting" opportunities when companies are distressed or facing low growth.

Klarman's passion for horse racing led him to establish Klaravich Stables Inc. in partnership with William Lawrence in 2006. Their horse, Cloud Computing, achieved victory in the 2017 Preakness Stakes. In 2019, Klarman and Lawrence won the Outstanding Owner category at the Eclipse Awards with their horse Bricks and Mortar. Notably, on his 65th birthday in 2022, Klarman's horse Early Voting won the Preakness Stakes.

Klarman maintains a low profile, rarely appearing in public or granting interviews. He resides in Chestnut Hill, Massachusetts, with his wife, Beth Schultz Klarman. The couple has three children. Klarman's brother, Michael Klarman, is a renowned professor at Harvard Law School.

Klarman is a registered independent voter who has contributed to both Democratic and Republican groups and candidates. However, since Donald Trump's election in 2016, his donations have predominantly favored Democrats.

Through the Klarman Family Foundation, which he operates with his wife, Klarman supports pro-democracy initiatives. The foundation focuses on supporting journalists, combating bigotry, and advocating for LGBT rights. Klarman is a prominent backer of political non-profits such as the Ending Spending Fund and the pro-same-sex marriage American Unity Fund.

During the 2007-2008 financial crisis, Klarman criticized the short-term thinking of other fund managers. He firmly believes in the importance of democracy and has openly expressed his opposition to Donald Trump's presidency.

Klarman is the co-founder and chairman of The Times of Israel, an Israel-based news organization.

He actively supports various organizations, including the Foundation for Defense of Democracies, the Israel Project, Birthright Israel, and the Middle East Forum.

According to Forbes, Klarman is ranked as the 15th highest earning hedge fund manager globally, with a personal fortune estimated at US$1.5 billion.

Klarman established The Klarman Family Foundation, which generously contributes to medical causes, Jewish organizations, and Israeli causes. He serves as the chairman of Facing History and Ourselves, an organization that develops programs to combat anti-Semitism and bigotry.

Klarman is actively involved with the Israel Project, a pro-Israel advocacy group. Between 2008 and 2010, he donated $4 million to the organization. Additionally, he is a key U.S. investor behind The Times of Israel.

Klarman's philanthropic endeavors extend to Cornell University, where he donated lead capital to fund the Seth '79 and Beth Klarman Humanities Building. He also contributed funds to Harvard Business School for the construction of Klarman Hall. Furthermore, Klarman established the Klarman Fellowships, a postdoctoral fellowship program at Cornell University.

In recognition of his exceptional achievements, Klarman was inducted into Institutional Investors Alpha's Hedge Fund Manager Hall of Fame in 2008. He is widely regarded as a "hedge fund titan" and a "quiet giant of investing."

Klarman is often referred to as "the Warren Buffett of his generation" and the "Oracle of Boston." Notably, Warren Buffett himself has publicly praised Klarman's investment acumen.

Klarman authored the book "Margin of Safety: Risk Averse Investing Strategies for the Thoughtful Investor" in 1991. The book, which has gone out of print, has become a sought-after relic in the finance community.

In 2008, Klarman edited the 6th edition of Benjamin Graham and David Dodd's seminal work, "Security Analysis."

Klarman is known for his love of classical music and has a vast collection of classical CDs.