The Washington Post Sunday

Gerald Tsai, 79; Celebrated ’60s Fund Manager

- By Patrick Donahue

Gerald Tsai, 79, whose reputation as a Wall Street whiz during the “ go- go” 1960s helped make him one of the first celebrity fund managers, has died.

United Rentals Inc., a Greenwich, Conn.- based company on whose board Mr. Tsai served, confirmed his July 9 death in a filing to the Securities and Exchange Commission. He died in New York of multiple organ failure.

As a money manager for Fidelity Investment­s in his late 20s and 30s, Mr. Tsai tended to bet on growth stocks such as Polaroid Corp., eschewing safer choices such as U. S. Steel Corp. or General Motors Corp., as he became a pioneer of performanc­e funds. His Fidelity fund, started in 1957, grew 27- fold by 1965.

His picks “ were then thought to be outrageous­ly speculativ­e and unseasoned for a mutual fund,” John Brooks wrote in his 1973 book, “ The Go- Go Years.”

When the market boomed in the 1980s, Mr. Tsai used his talents to transform a tin- can maker, American Can Co., into a financials­ervices company, Primerica Corp. The 1987 stock- market crash took Primerica with it, and Mr. Tsai sold the company to Sanford Weill’s Commercial Credit Corp. for $ 1.7 billion, becoming a seed for Citigroup Inc., the largest U. S. bank.

Although Mr. Tsai’s innovative investing didn’t always lead to sustained success, some parts of his technique remained the same.

“ The key is rising earnings per share,” Mr. Tsai said in 2000. “ Then, if you’re wrong in your timing, you can bail out a year later, two years later, because the stock price will eventually catch up and reflect the earnings.”

Gerald Tsai Jr. was born in Shanghai on March 10, 1929, to Chinese parents during “ the height of the market,” as he put it.

He moved to the United States 18 years later and graduated from Boston University with bachelor’s and master’s degrees in economics.

In 1951, he became a securities analyst at Bache & Co. before finding a job at Fidelity as a $ 90- aweek stock analyst.

The Fidelity fund he began managing five years later grew from $ 12.3 million in 1959 to $ 340 million in 1965. That success was leveraged to start his Manhattan Fund, which drew $ 247 million, 10 times what he had expected. Still, soon after Mr. Tsai sold the Manhattan Fund in 1968 to CNA Financial Corp., it lost 6.6 percent and took a bit of his reputation with it.

He reemerged a decade later, using CNA stock to buy an 18 percent holding in mail- order insurance company Associated Madison Inc. The company was merged with American Can, and Mr. Tsai took advantage of the multiplyin­g financial assets.

The 1987 stock- market crash and the sale to Weill still left Mr. Tsai with $ 39 million, with which he ran his own brokerage from an office in Manhattan’s Pan Am building, now MetLife.

Mr. Tsai’s marriages to Loretta Young, Marlyn Chase, Cynthia Ann Ekberg and Nancy Raeburn ended in divorce, the New York Times said. The Times said he’s survived by his sons, Christophe­r and Gerald, his daughter Veronica and five grandchild­ren.

A 2006 engagement to Sharon Bush, the ex- wife of President Bush’s younger brother Neil, was called off, the Times said.

 ?? BY DANIEL ACKER — BLOOMBERG NEWS ?? At Fidelity Investment­s, Gerald Tsai, a pioneer of performanc­e funds, took risks on growth stocks, increasing his fund 27-fold from 1957 to 1965.
BY DANIEL ACKER — BLOOMBERG NEWS At Fidelity Investment­s, Gerald Tsai, a pioneer of performanc­e funds, took risks on growth stocks, increasing his fund 27-fold from 1957 to 1965.

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