Gerald Tsai Jr. (Chinese: 蔡至勇; pinyin: Cài Zhìyǒng; March 10, 1929 – July 9, 2008) was a billionaire investor and philanthropist who helped build Fidelity Investments into a mutual fund powerhouse.
Gerald Tsai Jr.
March 10, 1929
|Died||July 9, 2008 (aged 79)|
|Education||Wesleyan University (1947–48), Boston University (B.A., M.A. 1949)|
|Employer||Primerica, Fidelity Investments|
|Known for||Founder of Manhattan Fund|
Gerald Van Tsai
Tsai was a controversial figure. He pioneered the use of momentum investing in money management during the 1950s and 1960s. After starting Fidelity Investments' 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, at a time when broad diversification was the prevailing wisdom.
Tsai attended St. John's University, Shanghai before moving to the United States in 1947. He attended Wesleyan University for one semester, and graduated from Boston University with a Bachelor's and Master's in Economics.
In 1951, Tsai began as a security analyst at Bache and Company.
In 1958, Tsai 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, 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, and resigned in 1973.
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 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.
In 1982, Tsai became vice-chairman of American Can Company – a former component of the Dow Jones Industrial Average. 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 for $475 million. By this time, the combined company had changed its name to Primerica 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 and Commercial Credit Group, headed by Sanford I. Weill 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 interestsEdit
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.
Tsai was actively involved in philanthropy through the Gerald Tsai Foundation. He was a trustee of Boston University 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 and was a member of the board of overseers of the Wharton School of the University of Pennsylvania.
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'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 reported that the investor sued Ms. Bush in Manhattan Supreme Court after she refused to return the ring.
- "Virtuoso investor Gerald Tsai Jr. dies". UPI. 2008-07-11. Retrieved 2010-08-24.
- Stelter, Brian (2008-07-11). "Gerald Tsai, Innovative Investor, Dies at 79". New York Times. Retrieved 2010-08-23.
- Forbes, "Jerry Tsai's Smart Timing", January 10, 2000
- https://www.nytimes.com/2008/10/05/fashion/weddings/05field.html?pagewanted=all New York Times, "If Things Fall Apart, Who Gets the Ring", October 3, 2008
- Nocera, Joe (December 24, 2008). "The Go-Go Investor". New York Times. Retrieved October 15, 2007.
- Charles D. Ellis, James R. Vertin. "Wall Street People: True Stories of Today's Masters and Moguls". John Wiley and Sons, 2001, (pp. 159-162), ISBN 0-471-23809-0
- Campbell, Mary. "FIN Alternatives" (PDF). Tsai Capital. Stone Street Media LLC. Archived from the original (PDF) on 24 February 2015. Retrieved 8 May 2015.
- Tran, Hung. "Hedge Fund Shorting Emerging Markets". ETF.com. ETF.com. Retrieved 8 May 2015.
- Leinster, Colin; Slovak, Julianne. "JERRY TSAI LISTENS TO HIS MOTHER She nudged him to join Primerica. Now he's the boss. She liked the idea of buying Smith Barney. So he did. Best of all, she helped her proud son bury his has-been reputation". Fortune Archive. Fortune Magazine. Retrieved 8 May 2015.
- Ullian, Jessica. "Trustee Gerald Tsai, Jr., Dies at 79". BU Today. Boston University. Retrieved 8 May 2015.
- "Fund Officer Elevated". New York Times. 1960-06-01. p. 55.
- Young, Ian. "Gerald Tsai, the playboy financier who seduced America". South China Morning Post. South China Morning Post. Retrieved 8 May 2015.
- Jerry Tsai's Smart Timing, Forbes
- "Tsai Resigns as Fund Manager". New York Times. 1973-01-30. p. 45.
- Lueck, Thomas J. (1984-05-08). "American Can's Revamping". New York Times. p. D1.
- Cole, Robert J. (1988-08-30). "Leading Financiers Will Merge Companies in $1.65 Billion Deal". New York Times. Retrieved 2010-08-23.
- Monica Langley. Tearing Down the Walls: How Sandy Weill Fought His Way to the Top of the Financial World. Simon and Schuster, 2004, (pp. 159-162), ISBN 0-7432-4726-4]
- "Miss Ekberg Wed To Gerald Tsai Jr". New York Times. Retrieved 8 May 2015.
- Tu, Thanh Ha; Perreaux, Les (25 April 2014). "Toronto 'glitter girl' faces fraud charges for milking 92-year-old's trust account". The Globe and Mail. Retrieved 22 July 2015.
- If Things Fall Apart, Who Gets the Ring? The New York Times, October 3, 2008
- Bush Ex-Kin in Tug-of-War Over Giant Ring CBS News, February 11, 2009
- Sharon Bush Gives Gerald Tsai a Few Reasons Not to Pine for Her, New York Magazine, February 26, 2008