David Tepper: potentially the next Carolina Panther’s owner. What we know about him
Hedge fund manager David Tepper became a billionaire widely known to CNBC watchers by scoring on risky investments, especially during the financial crisis.
In recent years, he's added to his reputation by pouring his money into philanthropic efforts, sports teams and a "revenge house" in the Hamptons. His latest high-profile venture is a deal to buy the Carolina Panthers for $2.2 billion.
Despite his billions, Tepper, 60, is a down-to-earth guy who reflects his roots growing up in a lower-middle-class neighborhood in western Pennsylvania, says Charlotte businessman Felix Sabates, who has talked with Tepper during the sales process.
"I can promise you this, he's not going to lock himself up inside a skybox," Sabates said, in contrast to the team's much less visible current owner, Jerry Richardson.
The middle of three kids, Tepper was raised in a Jewish household near Pittsburgh, playing football and memorizing baseball card statistics, according to an extensive New York magazine profile. He helped pay his way through the University of Pittsburgh by stacking books at a fine arts library on campus.
Always good with numbers, Tepper majored in economics at Pittsburgh. After college, he worked as a credit and securities analyst at Equibank in Pittsburgh before going on to get his MBA at Carnegie Mellon.
By the mid-1980s, he had arrived at investment bank Goldman Sachs at a hot time for junk bonds, a low-grade type of corporate debt. Despite being a top performer, he reportedly was passed over for partner by the boss of his division, Jon Corzine, the future New Jersey governor.
Tepper hadn't endeared himself appropriately to Corzine and had a loud and profane personalty that wasn't an ideal fit at the white-shoe firm, according to the New York magazine profile.
After this snub, Tepper left in 1993 to set up a hedge fund called Appaloosa Management, named for the breed of horses. Hedge funds are a type of investment vehicle that typically pool money from wealthy investors and institutions to make bets on stocks, bonds and other financial instruments.
Over the years, Tepper scored on risky bets on Russian debt and bonds from bankrupt companies.
Most notably, his firm racked up a $7 billion profit in 2009 by buying shares of Charlotte-based Bank of America and Citigroup at their low point during the financial crisis. Forbes calls Tepper "arguably the greatest hedge fund manager of his generation," noting Appaloosa now manages about $17 billion for investors.
The magazine calculates Tepper's net worth at $11 billion.
Appaloosa has absorbed some setbacks. The firm ran into trouble over a 2008 trade in Wells Fargo stock and paid a $1.3 million penalty. Appaloosa also reached a settlement in 2009 with Delphi after the firm withdrew from a deal to lift the auto parts supplier out of bankruptcy.
Tepper's business dealings also earned him an unusual gift from a colleague acknowledging a successful bet on distressed debt: a pair of brass testicles that remain in Tepper's office despite the controversy they stirred in the New York magazine profile.
The billionaire moved Appaloosa from New Jersey to Miami in 2016 in order to be closer to his mother, sources close to the businessman have said. Others say it is because Florida has no personal income tax. Either way, the move triggered budget concerns by New Jersey lawmakers, according to Bloomberg.
Alan Shealy, principal at the Boise investment firm Claremont Partners, has been an investor of Appaloosa since 1994. Tepper's boldness is what sets him apart, Shealy told the Observer.
“In our salad days you needed to wear your seat belt and a helmet. It was a wild ride," Shealy said. "Ultimately, it turned out to everybody’s favor. But there were some moments when I really questioned whether I had the intestinal fortitude to stay with him."
Shealy said Tepper's "extracurriculars" outside hedge-fund management "haven't put a dent" in his performance.
"The guy is an amazing investor," he said. "He can rip apart a balance sheet in a minute and tell you where the value is. He’s made an enormous impact on my life."
As his wealth has grown, Tepper, the divorced father of three, hasn't been afraid to spend his money.
He hired singer Ashlee Simpson to perform at his daughter's bat mitzvah in 2005, for instance, according to the New York magazine piece. For his own 50th birthday party, Tepper danced onstage at the Mandarin Oriental with Ellen DeGeneres and sang “If It Makes You Happy” with Sheryl Crow.
In another flashy purchase, Tepper in 2011 bought a $43.5 million oceanfront mansion in the Hamptons that used to belong to the wife of Corzine. Tepper tore down the house and built a new one twice its size on the property.
The 15,000-square-foot house was dubbed "The Revenge Mansion" by tabloids when he finished it. "You could say there was a little justice in the world," Tepper told New York magazine.
The billionaire has also opened his wallet for philanthropic efforts.
In 2004, Tepper gave $55 million to his alma matter, Carnegie Mellon, which renamed its business school in his honor. “David Tepper is a visionary, both as a businessman and a philanthropist, and we are grateful for his generous support,” former CMU President Subra Suresh said after Tepper donated another $67 million to the school in 2013.
The David Tepper Charitable Foundation has assets worth $190.6 million, according to its most recent publicly available IRS filing. In the fiscal year ending November 2016, the foundation gave away $17.8 million to a variety of organizations, including to Carnegie Mellon, food banks, Jewish organizations, medical research groups and other colleges.
Tepper showed his passion for philanthropy in a CNBC interview shortly before the 2016 presidential election when he strongly criticized then-candidate Donald Trump for allegedly not giving "one dime" to food banks during the financial crisis and other times of need. "You can't tell me this is a charitable, generous person," he said.
Tepper has also made his mark in sports.
As a native of Pittsburgh, Tepper is a lifelong Steelers fan. He bought a 5 percent share of his hometown team in September 2009, months after the team won the Super Bowl. Based on the current valuation of the Steelers, Tepper's investment, which he will have to sell once he buys the Panthers, is worth $122.5 million.
Now, he is set to become the owner of the Carolina Panthers after an up-and-down sales process, which led him at one point to call the Observer to shoot down a story that he had dropped out of the bidding.
A source told the Observer he is buying the team for an NFL record $2.2 billion. NFL owners are expected to approve the deal next week.
"He is the pefect guy to the buy the team," said Sabates, the Charlotte businessman. "He knows the game. He is a poor kid from Pittsburgh who has done well."