Alberto Vilar has long loved the opera -- and that was before his life began to resemble one.
By Rich Blake
September 2002
Institutional Investor Magazine
With the plunge in Nasdaq stocks, Vilar’s Amerindo Investment Advisors has shriveled from $8 billion in assets in institutional accounts and three funds in March 2000 to a recent $1 billion. Annualized returns for the flagship $48 million-in-assets Amerindo Technology fund since January 2000: 37 percent. As of August the fund’s perfor- mance since the end of 1999 put it fourth from the bottom among the 3,127 equity funds tracked by Morningstar.
The enormous losses fueled rumors that Vilar was reneging on pledges made during the fat years to donate a quarter of a billion dollars to various leading opera houses, including $50 million to Washington’s Kennedy Center, $45 million to New York’s Metropolitan Opera House and $25 million to London’s Royal Opera House.
Then there’s his health: Vilar has been laid up for the past 12 months with severe back problems, having undergone four surgeries to repair two herniated discs. Around Christmastime he suffered a perforated gallbladder and a bout with peritonitis that nearly cost him his life. “At one point I was told 50-50,” he says.
Vilar’s funds are still hitting low notes, but his personal life is starting to turn around. He’s getting back on his feet, and he’s found love. The 61-year-old recently became engaged to Karen Painter, 37, an associate professor of musicology at Harvard University. The two met in Salzburg last summer after an opera.
Vilar, considered the greatest opera benefactor since 19th-century Wagner patron King Ludwig of Bavaria, dismisses speculation that he won’t be able to pay his opera pledges. He admits to rescheduling some payments, which have all been plotted out in installments over the next several years, but insists he hasn’t reneged on a single penny despite devastating losses to his business.
Raised in Cuba and Puerto Rico,
Vilar became infatuated with opera while studying in Lon-don. His 32-room Manhattan apartment sup- posedly resembles a mini opera house, complete with a concert hall that seats 70 where he holds private recitals. Vilar attends about 100 operas a year all over the world.
Talk of his charitable backpedaling, he insists, resulted from the fact that he was bedridden. “The European press began this speculation that I was laying low,” says Vilar. “No one heard from me, so they began to wonder in print about whether I’d missed any payments, was I late with payments -- and the articles begot more articles. I found myself thinking, ‘I’ve pledged $250 million of my own money to opera houses all over the world. Late payments compared to who?’ ”
Satisfying his investors will be a more difficult challenge. Vilar’s Amerindo Technology fund posted a 251 percent return in 1999, but he has since become one of the poster boys for the tech collapse. Vilar certainly didn’t predict the bubble’s end. In May 2000, as the bubble was starting to burst, he was widely quoted as saying that the bull market in tech stocks was “only in the first inning.” In 2000 the fund lost 64.8 percent; in 2001 it dropped 50.7 percent; and through late August it was down about 40 percent.
Vilar is not forlorn. Amerindo gave institutional investors, who account for 93 percent of his assets, an average annual return of 34 percent net of fees during the 1990s, and more than a dozen pension clients are sticking with the firm, he says. And he maintains that “the best is yet to come” in the tech sector. “I’ve been at this for 35 years -- we are only in the early stage of the third generation of technology,” he says. “We had mainframes. Then we had desktop computing. It has only been since around 1997 that we’ve seen the explosion of what I call Internet-based computing. This is still emerging technology. And long term, emerging technology is the place to be.”
Vilar insists that the tech rebound may come sooner than people think. He holds a mix of public and private investments. “The plan is to get these private companies public and double up on the ones we think are going to be winners. There are at least 15 or so of these companies that are at the gate, waiting for the investment bankers to call and tell them the environment is right to go public.”
