Early Life
Seth Klarman was born on May 21, 1957, in New York City. When he was six years old, he moved to the Mt. Washington area of Baltimore, Maryland, near the Pimlico Race Course. His father, Herbert E. Klarman, was a public health economist at Johns Hopkins University, and his mother was a psychiatric social worker. Klarman's early interest in business was evident from a young age; at four, he redecorated his room with price tags, a hint of his future investment style.
Rise to Success
Klarman's career began with an internship at Mutual Shares fund, where he was introduced to value investing principles. After graduating from Harvard Business School in 1982, he founded The Baupost Group with William J. Poorvu and partners. Baupost started with $27 million in capital and, over time, grew into one of the most successful hedge funds globally, generating an impressive average annual return of 20%. Klarman has been recognized for his consistent investment returns and was inducted into Institutional Investor Alpha's Hedge Fund Manager Hall of Fame in 2008.
Key Business Strategies
Klarman is a proponent of value investing, buying assets at prices sufficiently below their underlying value to allow for human error and market volatility. He is known for a disciplined, risk-averse approach, often holding a significant amount of cash. Klarman emphasizes buying when others are selling and staying away from conventional practices to ensure superior performance. His book, "Margin of Safety," is a classic in value investing, outlining strategies for risk-averse investing.
Philanthropy
Klarman and his wife, Beth, are committed to philanthropy through the Klarman Family Foundation. The foundation focuses on supporting various causes, including medical research, Jewish organizations, and initiatives promoting democracy and social justice. The Klarmans have also signed The Giving Pledge, committing to donate at least half of their wealth to philanthropic causes.