Gerald Tsai Biography

Gerald Tsai Jr. ("?"?"?"? Cai Zhiyong, March 10, 1929 " July 9, 2008) was an American financier and philanthropist who helped make Fidelity Investments into a mutual fund powerhouse. Tsai pioneered the use of performance funds in money management during the 1950s and 1960s, and later turned a canning company into financial services giant Primerica.

After starting Fidelity Investments' first publicly sold aggressive growth fund in 1958, the Fidelity Capital Fund, he later founded the investment management firm the Manhattan Fund, an aggressive growth fund, in 1965. 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.

Early career

Tsai joined Fidelity Management and Research in 1952, and was named vice president in 1960. 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 1978, Tsai acquired a small insurance company, Associated Madison, for $2.2 million and sold it four years later to American Can Company for $162 million.

Primerica

Tsai became Vice Chairman of American Can Company - a former component of the Dow Jones Industrial Average - in 1982. 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 1997, 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 interests

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.

Philanthropy

Tsai was actively involved in philanthropy through the Gerald Tsai Foundation.

Tsai was a trustee of Boston University from 1967 to 1977, and from 1988 to 2002. Tsai served as 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.

Personal life

Tsai was married four times. In 2006, Tsai was engaged to Sharon Bush, the former wife of President George W. Bush's brother, Neil Bush. 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 that Tsai gave to Ms. Bush and demanded back. 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.

Death

Christopher Tsai, a hedge fund manager and president of Tsai Capital, said his father died in Manhattan of multiple organ failure on July 9, 2008. Besides Christopher, he is survived by two other children.