Michael Steinhardt

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Michael Steinhardt : biography

December 7, 1940 –

Career

Working as an analyst at Loeb, Rhoades & Co., Steinhardt followed the conglomerate industry, which included companies such as Automatic Sprinkler (now defunct), City Investing (also defunct), and the best-known conglomerate of its day, Gulf+Western (now part of Viacom and Viacom’s spinoff CBS).

In 1967, using earnings from his investments, Steinhardt founded the hedge fund Steinhardt, Fine, and Berkowitz (later Steinhardt Partners) with co-investors William Salomon, former managing partner of Salomon Brothers and Jack Nash, founder of Odyssey Partners. Steinhardt Partners averaged an annualized return for its clients of 24.5%, after a 1% management fee and a "performance fee" of 15% (early in his career, later 20%) of all annual gains, realized and unrealized, nearly triple the annualized performance of the S&P 500 Index over the same timeframe.

After decades of successfully managing the fund, Steinhardt and his firm were investigated for allegedly trying to manipulate the short-term Treasury Note market in the early 1990s. He personally paid 75% of a total fine of $70 million as part of settlement with the U.S. Securities and Exchange Commission and Department of Justice. His firm made $600 million on the Treasury positions. In "No Bull," Steinhardt said he did nothing wrong, but merely settled the case in order to "move on." Following a negative performance in his hedge fund in 1994, Steinhardt Partners enjoyed an excellent 1995, with performance in line with its historical record. The hedge fund closed and distributed all monies to its limited partners at the end of 1995, leaving Steinhardt himself very wealthy and very liquid.

In 2004, Steinhardt came out of retirement to work for Index Development Partners, Inc.,http://www.wisdomtreeinvestments.com/press/pdf/IDP-Completes-$9-Million-Financing.pdf now known as WisdomTree Investments. He is chairman of WisdomTree, which offers dividend and earnings-based index funds rather than traditional index funds based on market capitalization. As of December 31, 2012, WisdomTree had $18.3 billion under management and is growing by 10% a month. During the fall of 2007 and 2008, Wisdom Tree’s growth stagnated, as the stock market, especially the financial sector, in which Wisdom Tree’s dividend-based funds are overweighted, tanked, as did Wisdomtree’s stock. However, in recent months, as the Wisdom Tree funds tended to outperform their "bogies," asset growth resumed its earlier pace and its stock price appreciated accordingly. In 2010, Steinhardt was hired by IDT Corporation to serve as Chairman of the Board of Israel Energy Initiatives Ltd (IEI), Genie’s Israel-based alternative energy affiliate.

Political activism

Steinhardt is active in political circles ranging from centrist Democratic to neo-conservative, having been a past chairman of the Democratic Leadership Council and a board member of the Foundation for the Defense of Democracies, to which he donated $250,000 in 2002.McCarthy, Daniel, American Conservative, November 17, 2003 According to Newsmeat.com, a tracker of publicly available campaign contributions, in the 2000 New York senatorial primary, he donated $1,000 (then the maximum allowable under law) to Republican Rudy Giuliani. When Mayor Giuliani dropped out of the race, Steinhardt contributed an equal amount to Giuliani’s successor, Rick Lazio. Steinhardt also gave $1,000 to Lazio in the general election.

In 2001, Steinhardt made his foray into publishing, he along with several other investors including Conrad Black, founded the New York Sun, a niche New York City newspaper best known for its unflinching pro-Israel support and generally (but not invariably) neo-conservative outlook. Steinhardt wrote a letter to President Clinton advocating the pardon of Marc Rich, calling him "my friend…who has been punished enough" (on January 20, 2001, Clinton’s last day in office, Rich was in fact pardoned.)Vickers, Marcia, Business Week, July 18, 2005 Steinhardt was an early promoter of the possible presidential candidacy of Michael Bloomberg in 2008.Heilemann, John, New York Magazine, December 4, 2006.