Richard Rainwater Biography

Richard E. Rainwater (born 1943) is an American investor and fund manager.

Early life

The son of a wholesale grocer, he grew up in Fort Worth, Texas. He graduated from the University of Texas at Austin with a degree in mathematics, where he was a member of the Tau chapter of the Kappa Sigma fraternity. He was recognized by the national organization in 1996 as Kappa Sigma Man of the Year. After graduation, he went on to earn a 1968 MBA from Stanford Business School.

Career

After business school, Rainwater landed a job as an investment banker, but soon accepted an invitation from former Stanford classmate Sid Bass to manage and diversify the Bass family portfolio. Rainwater became the chief financial architect for the Bass family investments. He was given $5 million to invest during his first year and managed to lose it all. Rainwater then sought a more methodical investment strategy by speaking to investors like Warren Buffett and Charles Allen, Jr., while also studying the work of Benjamin Graham and David Dodd. After that debacle, Rainwater sought advice on more qualitative investing and his investments began to take off, according to "Wall Street's Best-kept Secret," a cover story that appeared in the October 20, 1986 issue of Business Week. Rainwater eventually transformed the Bass family fortune into $5 billion. He is reported to have amassed $100 million for himself during that period, which he later used as seed money for his own fund.

Rainwater has been an independent investor since 1986, investing in more than 30 companies and purchasing over 32 million square feet of office space across the country with concentrations in Houston, Dallas, Austin, and Denver. Fortune magazine described his investing style as "analytically rigorous but opportunistic and Texas-sized in its audacity."

He founded or co-founded firms including ENSCO International, an oil field service and offshore drilling company, in 1986; Columbia Hospital Corporation in 1988; Mid Ocean Limited, a provider of casualty re-insurance, in 1992; Crescent Real Estate Equities, Inc. in 1994; and Pioneer Natural Resources in 1997. He has been called a "capitalist cowboy for the '90s, leading the way into new frontiers of finance."

In 2010, he was awarded the Arbuckle Award at Stanford, where he received a MBA in 1968. In accepting the award, he credited his mother with giving him people skills that had an enormous effect on his business and deal making success.

Betting on peak oil

Beginning in the late 1990s, when petroleum prices were near historic inflation-adjusted lows, Rainwater began taking long positions on petroleum futures. He was influenced by reading Beyond the Limits, the sequel to Limits to Growth. Over the following years, Rainwater read further about peak oil, including books such as The Long Emergency by James Kunstler and online discussions. Rainwater took positions in financial markets that effectively amounted to betting with peakniks and malthusians against cornucopians, somewhat like a reprise of the famous Simon"Ehrlich wager, except on a much larger scale. The oil price increases since 2003 have made these bets pay off handsomely for Rainwater.

While remaining guardedly optimistic against the worst-case scenario predictions of doomers, Rainwater sees the peak oil phenomenon as a grave threat and seeks to call attention to it.

Personal life

With an estimated net worth of around $2.3 billion, He is ranked by Forbes as the 171st richest person in the United States and the 512th richest person in the world. He is married to financier Darla Moore. In 2009 he was diagnosed with progressive supranuclear palsy. In March 2011 a court declared him incapacitated, and his youngest child, Matthew, became his legal guardian.