Reports that David Tepper is buying an oceanfront estate in the Hamptons for as much as $50 million is not too surprising to those who know him. And it is not only because the founder of Appaloosa Management made about $4 billion last year after buying the stocks and other paper of banks and other beaten down financials.
Until recently, Tepper, who has lived in the same suburban New Jersey house he bought about 20 years ago, tried to do the best he could to foster middle-class type values despite his enormous success. Tepper, who grew up in a working class neighborhood in Pittsburgh, liked to point out that he did not own a second home or boat. However, in recent months he has been telling people that with his youngest child poised to head off to college in the fall, he no longer needs to be around all the time or raise his kids in one home.
He is ready to spend his huge amount of wealth in a more conspicuous way. “I tell my kids, now I am ready to be rich,” Tepper quipped in an interview last fall. “I’m serious.” Oh sure, in 2004 he pledged $55 million to Carnegie Mellon, which in turn named its business school the Tepper School of Business at Carnegie Mellon University.
However, he said at the time he was thinking about buying an additional home, and one of the two places he singled out as examples was the Hamptons, the other being Florida. Of course, Tepper could afford to buy both.
Meanwhile, last year he became a minority investor in his hometown Pittsburgh Steelers football team. Tepper also gives to charities that try to boost the quality of education in New Jersey. During the recession, he also donated money to soup kitchens, pantries and food banks in New Jersey and Pittsburgh.
Tepper certainly has earned the right to spend his money. Through March his funds — Appaloosa I and Palomino —were up roughly 14.5 percent after surging 133 percent and 129 percent in 2009.
Stephen Taub , who has covered the hedge fund industry for 30 years, is a contributing editor to Institutional Investor and Absolute Return-Alpha magazines.
