The Game of Life
Former hedge-fund manager Michael Steinhardt considers his legacy
Steinhardt’s gardens include not only one of the largest collections of maple trees in the world but also exotic animals like camels, zebras, and llamas.
Photo by Matthew Furman/The Forbes Collection/getty images
Two decades ago, when Michael H. Steinhardt retired after 30 years of running hedge funds, he told an interviewer he didn’t want his tombstone to just read “Money Manager.” To be sure, that single moniker would not do justice to this Renaissance man. Even a list of his numerous and stellar achievements would not adequately describe the enigma of his essence. He’s a paradox.
Perhaps the pomegranate (being more complex than the apple) doesn’t fall far from the tree. Steinhardt, raised in Brooklyn, is the son of first-generation, American-Jewish parents who were divorced—a rarity at the time. His father was a renowned gambler and did hard time for being Meyer Lansky’s jewel fence. Yet, “he was a brilliant and moral guy,” Steinhardt recalls, “and he introduced me to investing by giving me some stock for my bar mitzvah.”
Steinhardt became a billionaire as a result of a remarkable track record of year-after-year profits in the securities markets. He is widely regarded as a founder of active money management and the modern hedge fund and credited with having been at the forefront of large-block trading. His market-making strategy of profiting from huge bets no one else was willing to make or capable of making provided liquidity for a hungry market, but, truth be told, his motivation for such risk was purely selfish. Much more macro in his thinking than micro, he has probably shorted more securities than any other investor. And while a former Goldman Sachs senior partner described Steinhardt as being more a moralist than a profiteer, a man whose word is his bond, Steinhardt paid tens of millions in fines levied by the SEC for financial engineering outside the limits of the law.
He reveals: “My career in the financial markets was more about proving I was the smartest guy in the business than about accumulating wealth.” He still runs his own money, is the chairman of the multi-billion-dollar Wisdom Tree family of ETFs (exchange-traded funds), and admits to being addicted to the thrill of trading. So perhaps he is more an inveterate gambler, like his dad, than financial prophet.
Steinhardt identifies first and foremost as a Jew but professes, “I’m an atheist” in the same breath. He is one of the leading Jewish philanthropists of all time, having donated hundreds of millions to numerous Jewish charities. He founded Birthright Israel (sending hundreds of thousands of Jewish kids to Israel for an experience intended to form a lasting bond) and runs the Steinhardt Foundation (focused on supporting Jewish charter schools, fostering Sabbath dinners and other American-Jewish culture, and publishing news and opinion from the American-Jewish community). He’s been working for years on a book about how to perpetuate Judaism in the diaspora, but the basic tenets of being Jewish that he’s developed are more an iteration of behaving morally than a guide to religiosity, and his Jewish identity is more about Zionism and Jewish culture than a reflection of the Torah.
He is a legendary art and antiquities collector but admits, “I get little satisfaction from any of my material accumulations.” In 2013, he sold off most of what was one of the world’s finest collections of Judaica. Indeed, he seems to get more pleasure from donating multi-million-dollar works of art (including a Rembrandt) to the Israel Museum in Jerusalem, than from anything hanging in any of his own homes.
Which brings us to his garden. At his weekend home in Mount Kisco, the married father of three manages 58 acres chockful of specimen flora and fauna gathered from around the world (and occupied by a zoo-full of exotic wild animals). Steinhardt says his garden “is the only possession that gives me pure joy” and remarks, “Is there anything more beautiful than a field of red poppies?” It seems his garden is an oasis for a complicated man.
At 76, Steinhardt has surely lived a full life, one full of integrity and honor. Perhaps the best epitaph for such a man is the simple Yiddish word: mensch.