Gerald Tsai Jr. (; March 10, 1929 – July 9, 2008)
[ was a billionaire investor and philanthropist who helped build ]Fidelity Investments
Fidelity Investments, commonly referred to as Fidelity, earlier as Fidelity Management & Research or FMR, is an American multinational financial services corporation based in Boston, Massachusetts. The company was established in 1946 and is on ...
into a mutual fund powerhouse.
After starting Fidelity Investments
Fidelity Investments, commonly referred to as Fidelity, earlier as Fidelity Management & Research or FMR, is an American multinational financial services corporation based in Boston, Massachusetts. The company was established in 1946 and is on ...
' first publicly sold aggressive growth fund in 1958, the Fidelity Capital Fund, he later founded the Manhattan Fund, an aggressive growth fund, in 1965. Tsai sold his interest in the fund complex in 1968 but continued to manage the funds. By 1969 the funds collapsed, losing 90% of their value. An early proponent of momentum investing, Tsai's specialty was concentrating his portfolios on narrow batches of glamour stocks, including Xerox and Polaroid Corporation
Polaroid is an American company best known for its instant film and cameras. The company was founded in 1937 by Edwin H. Land, to exploit the use of its Polaroid polarizing polymer. Land ran the company until 1981. Its peak employment was 21,00 ...
, at a time when broad diversification
Diversification may refer to:
Biology and agriculture
* Genetic divergence, emergence of subpopulations that have accumulated independent genetic changes
* Agricultural diversification involves the re-allocation of some of a farm's resources to n ...
was the prevailing wisdom.
Tsai later became CEO of a can company, American Can Company
The American Can Company was a manufacturer of tin cans. It was a member of the Tin Can Trust, that controlled a "large percentage of business in the United States in tin cans, containers, and packages of tin." American Can Company ranked 97th amon ...
. He was the first Chinese-American CEO of a Dow Jones Industrials company.[
]
Early life
Tsai was born to Gerald Tsai Sr. and Ruth Tsai in Shanghai, where he lived as a child. His mother was a stockbroker.
His father attended the University of Michigan and was the Shanghai district manager for the Ford Motor Company.
Education
Tsai attended St. John's University, Shanghai
St. John's University (SJU) was a Christian university in Shanghai. Founded in 1879 by American missionaries, it was one of the oldest and most prestigious universities in China, often regarded as the Harvard of China.
After the founding of the ...
before moving to the United States in 1947. He attended Wesleyan University
Wesleyan University ( ) is a private liberal arts university in Middletown, Connecticut. Founded in 1831 as a men's college under the auspices of the Methodist Episcopal Church and with the support of prominent residents of Middletown, the ...
for one semester, and graduated from Boston University
Boston University (BU) is a Private university, private research university in Boston, Massachusetts. The university is nonsectarian, but has a historical affiliation with the United Methodist Church. It was founded in 1839 by Methodists with ...
with a Bachelor's and Master's in Economics.
Early career
In 1951, Tsai began as a security analyst at Bache and Company. In 1952, he joined Boston's Fidelity Management and Research
Fidelity Investments, commonly referred to as Fidelity, earlier as Fidelity Management & Research or FMR, is an American multinational financial services corporation based in Boston, Massachusetts. The company was established in 1946 and is on ...
, and was named vice president in 1960. In 1958, he became fund manager of the newly formed Fidelity Capital mutual fund.
By 1965, Tsai had sold his Fidelity stock and started the Manhattan Fund which won him widespread attention. When the fund first offered shares, a modest offering of 2.5 million shares quickly ballooned to a total of 27 million, bringing the fund $247 million in capital and representing what was at the time the biggest offering of an investment company.
In 1968, he sold the fund for $27 million in stock to the CNA Financial Corporation
CNA Financial Corporation is a financial corporation based in Chicago, Illinois, United States. Its principal subsidiary, Continental Casualty Company (CCC), was founded in 1897. CNA, the current parent company, was incorporated in 1967.
CNA is ...
, just as the fund's superior results were declining and as the bull market was starting to wane.[
] He remained with Tsai Management, the company he had founded to manage the Manhattan Fund, after the sale. In 1973 Tsai resigned from CNA. He sold his CNA stock and bought a brokerage house, renaming it G. Tsai & Co.
In 1978, Tsai acquired an insurance company, Associated Madison, for $2.2 million and sold it four years later to American Can Company
The American Can Company was a manufacturer of tin cans. It was a member of the Tin Can Trust, that controlled a "large percentage of business in the United States in tin cans, containers, and packages of tin." American Can Company ranked 97th amon ...
for $162 million. The sale was recommended by William Stewart Woodside, the then chairman and chief executive of American Can Co., for Tsai to join the corporate team of American Can Co. According to Woodside, he gave Tsai $500 million to invest.
Primerica
In 1982, Tsai became vice-chairman of American Can Company
The American Can Company was a manufacturer of tin cans. It was a member of the Tin Can Trust, that controlled a "large percentage of business in the United States in tin cans, containers, and packages of tin." American Can Company ranked 97th amon ...
– a former component of the Dow Jones Industrial Average
The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow (), is a stock market index of 30 prominent companies listed on stock exchanges in the United States.
The DJIA is one of the oldest and most commonly followed equity indexe ...
. Tsai later gained control of the company. American Can was a container production and food packaging business, and Tsai orchestrated its shift toward the more lucrative financial services sector.
In 1987, Tsai purchased the financial firm Smith Barney
Morgan Stanley Wealth Management is an American multinational financial services corporation specializing in retail brokerage. It is the wealth & asset management division of Morgan Stanley.
On January 13, 2009, Morgan Stanley and Citigroup an ...
for $475 million. By this time, the combined company had changed its name to Primerica
Primerica, Inc. (NYSE: PRI) is a company that provides insurance, investment and financial services to middle income families in the United States and Canada.
Primerica is the parent company of National Benefit Life Insurance Company, Prime ...
to reflect its financial focus and Tsai was chairman and chief executive officer, making him the first Chinese-American to lead a Dow Jones Industrials company.
A year later, Primerica
Primerica, Inc. (NYSE: PRI) is a company that provides insurance, investment and financial services to middle income families in the United States and Canada.
Primerica is the parent company of National Benefit Life Insurance Company, Prime ...
and Commercial Credit Group, headed by Sanford I. Weill
Sanford I. "Sandy" Weill (; born March 16, 1933) is an American banker, financier and philanthropist. He is a former chief executive and chairman of Citigroup. He served in those positions from 1998 until October 1, 2003, and April 18, 2006, resp ...
were combined in a $1.65 billion deal. With 1.5 million shares, Tsai remained the largest shareholder and was named a director, while Weill ran the company. Tsai received a golden parachute worth an estimated $40 million.
Other business interests
Later in his life, Tsai re-entered the insurance industry, becoming chief executive officer of the Delta Life Corporation. In 1997, Tsai sold Delta Life to AmerUs Life Holdings for $185 million. Tsai was on the board of directors of numerous companies, including Apollo Investment Corporation, Rite Aid, Saks, United Rentals and Zenith Insurance Company
Zenith Insurance Company is an American insurance company headquartered in California specializing in workers' compensation insurance. It has been an indirect wholly owned subsidiary of Canadian Fairfax Financial since 2010.
Zenith operates nati ...
.
Philanthropy
Tsai was actively involved in philanthropy through the Gerald Tsai Foundation. He was a trustee of Boston University
Boston University (BU) is a Private university, private research university in Boston, Massachusetts. The university is nonsectarian, but has a historical affiliation with the United Methodist Church. It was founded in 1839 by Methodists with ...
from 1967 to 1977 and from 1988 to 2002. He was an honorary member of the board until his death. The Tsai family donated $7.5 million to the university to establish the Tsai Performance Center and Tsai Fitness Center.
Tsai served on the board of trustees of the School of Medicine Foundation Board and the NYU Langone Medical Center, where he established the Gerald Tsai Transplantation Unit. Tsai also served on the board of trustees of the Norton Museum of Art
The Norton Museum of Art is an art museum located in West Palm Beach, Florida. Its collection includes over 8,200 works, with a concentration in European, American, and Chinese art as well as in contemporary art and photography. In 2003, it ove ...
and was a member of the board of overseers of the Wharton School of the University of Pennsylvania.
Personal life
Tsai was married four times and had three children, including Christopher Tsai, founder of Tsai Capital.
In 1969, he divorced his first wife, Loretta Young and almost immediately remarried. His first two marriages each lasted 17 years.
In 1987, Tsai married Cynthia Ann Ekberg, the then vice president of Kidder Peabody & Company in San Diego. Ekberg is the daughter of Kathleen Culver of Western Springs, Ill., and Gerald Von Ekberg of Coronado. Her father is the president of the Barron Capital Corporation, financial consultants in San Diego. He divorced his third wife, Nancy Raeburn, in 2006.
In 2006, Tsai was engaged to Sharon Bush, the former wife of businessman Neil Bush (President George W. Bush
George Walker Bush (born July 6, 1946) is an American politician who served as the 43rd president of the United States from 2001 to 2009. A member of the Republican Party, Bush family, and son of the 41st president George H. W. Bush, he ...
's brother).[ The marriage was called off in 2008 after a high-profile breakup that resulted in a legal battle over an 11-carat-canary-diamond ring.] The ''New York Times'' and CBS News
CBS News is the news division of the American television and radio service CBS. CBS News television programs include the ''CBS Evening News'', '' CBS Mornings'', news magazine programs '' CBS News Sunday Morning'', '' 60 Minutes'', and '' 48 ...
reported that the investor sued Ms. Bush in Manhattan Supreme Court
The Supreme Court of the State of New York is the trial-level court of general jurisdiction in the New York State Unified Court System. (Its Appellate Division is also the highest intermediate appellate court.) It is vested with unlimited civ ...
after she refused to return the ring.
Death
Tsai died of multiple organ failure in New York City on July 9, 2008.[
]
References
External links
Mutual Fund Timeline
{{DEFAULTSORT:Tsai, Gerald
1929 births
2008 deaths
20th-century American businesspeople
American chief executives of financial services companies
American financiers
American businesspeople in insurance
American manufacturing businesspeople
American money managers
American people of Chinese descent
American philanthropists
Boston University College of Arts and Sciences alumni
Businesspeople from Shanghai
University of Pennsylvania people
Wesleyan University alumni
American Can Company