How Billionaire Hedge Fund Manager David Tepper Got The Coldest Revenge Ever On His Former Boss

Early Life

Tepper received a job at Republic Steel in Ohio two years after receiving his degree from CMU. He transferred to Keystone Mutual Funds in Boston after another two years. After spending a year in Boston, Tepper joined Goldman Sachs in 1985 as a credit analyst in New York City.

Within six months he was his division’s head trader, specializing in high yield bonds, also known as junk bonds… frequently referred to as debt issued by dangerous businesses.

Goldman Sachs

Analyzing the credit of financial institutions was David’s area of expertise. He was aware of the banks that would survive the catastrophe and those that wouldn’t. He acted swiftly to purchase the bonds of the banks he believed would survive the crisis. He made a pittance of a purchase. In addition to earning high quarterly interest fees, the underlying value of those bonds soared in value as the markets recovered.

Goldman Sachs, which was a private partnership at the time, made an unimaginable fortune in the recovery thanks, in no small part, to David. You can see why David believed he would soon be accepted into the exclusive group of Goldman partners.

Being named a partner at Goldman came with a basic income of $1 million in the early late 1980s/early 1990s. With each partner receiving a portion of the bonus pool, a partner’s total compensation may potentially exceed $5–10 million. Most significantly, Goldman partners obtained valuable pre-IPO shares of the company during the pre-IPO period.

David Tepper
(Photo by Scott Cunningham/Getty Images)

Jon Corzine

Tepper left Goldman at the end of 1992, enraged and disgusted at being passed over time and time again. Goldman had $2.7 billion in profits in 1993. $25 million was made by his former boss.

David rented a desk from a buddy who managed a mutual fund and started trading his personal assets aggressively in an effort to accumulate enough capital to start his own fund.

Jon Corzine via wikimedia/public domain

through wikimedia/public domain: Jon Corzine

Appaloosa Management

With 57 million dollars in assets under management, David founded Appaloosa Management in 1993. (AUM). That $57 million was increased to $300 million by Appaloosa in its first year of operation. In 1995, AUM exceeded $450 million; in 1996, it reached $800 million.

Out of the 20 largest single-day market crashes, three occurred in late 2008 as the mortgage bubble time bomb exploded. Financial institutions that were formerly in charge, like Bear Stearns and Lehman Brothers, abruptly went out of business. David researched the banks he thought would survive and made significant investments in their debt, just as he had done in past catastrophes. At the time, many individuals didn’t believe the financial sector as we know it had a chance of surviving at all.

When 2008 was over, Appaloosa had put up a 120% return. The company generated $7 billion in earnings for its stockholders.

David received a $4 billion personal reduction.

He received by far the largest salary on Wall Street in that year.

For the following many years, David would consistently rank among, if not the highest-paid individuals on Wall Street.

David Tepper has a $12 billion net worth as of this writing.

Revenge On Corzine

In May 1999, Jon Corzine’s partnership stake in Goldman Sachs was instantaneously worth $400 million. For reasons we don’t need to get into here, Corzine was actually fired from Goldman that same year in an ouster orchestrated by his nemesis, future Treasury Secretary Hank Paulson.

Jon and his wife Joanne primarily withdrew to their magnificent beachfront home in the Hamptons village of Sagaponack after being sacked.

Jon and his wife Joanne Dougherty had been married since 1969. They had three young ones.

“Jon cherished that home. There he was able to unwind. It was enormous. You could see how much money they invested everywhere you turned. Every bedroom had an armoire the size of the ceiling, like Joanne had bought them in bulk You couldn’t find any personal touches anywhere. Where can we sit, one of my children once asked me?”

Jon grew interested in politics out of boredom. He ran a victorious Senate race with $62 million of his own funds. He bought $5 million town house in Washington D.C. and started splitting his time between DC and the Hamptons. Jon invested $43 million of his own funds to win the 2006 election for governor of New Jersey.

When everything was said and done, Jon decided to gift Joanne $350 million in cash and assets, which is nearly exactly half of the wealth he amassed over the course of his many years at Goldman.

One of Joanne’s main demands in the divorce was to keep the Hamptons residence for herself. Finally, Corzine reluctantly concurred. When the property was given to Joanne, the pair valued it at $9 million, according to VanityFair.

Joanne rented out the home when she wasn’t living there. She could pull down $900,000 renting the home for the summer.

In an off-market, all-cash deal with no brokers (so no commission fees), Joanne sold the home for $43.5 million. Almost five times what Jon paid for the mansion a couple years ago.

David Tepper was the buyer.

The new mansion David Tepper built is seen in the drone footage below, which was shot on a gorgeous morning following a significant snowfall. Starting at the 10 second mark and continuing to the 40 second mark, you can see the house. Clearly visible:

Via Google Maps

You are gazing at a middle finger of 20,000+ square feet aimed towards David Tepper’s former employer.

This was just a gigantic FUCK YOU to Jon, as a friend of both sides would subsequently remark.

So, there you have it, everyone. When you make it someday, that’s what you need to do to the boss/girlfriend/boyfriend etc who got in your way.

Here’s one more entertaining David Tepper tale to end on.

$100 Million Checking Account

That is $99 million that has been set aside. After the receipt was posted to a Hamptons blog, there was a lot of guesswork and speculation in the financial sector. Tepper quickly attested that he was the account holder:

Via Google Maps

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