Robert F. Smith, CEO and founder of private equity firm Vista Equity Partners, just graced the cover of Forbes’ richest Americans issue.
With a net worth of $US2.5 billion, he’s ranked #268 on the list of Forbes’ wealthiest Americans.
That puts Smith ahead of early Facebook investor Jim Breyer, who has a net worth of about $US2.4 billion, and on par with private equity veteran and Philadelphia 76ers co-owner Josh Harris, who has earned $US2.5 billion to date.
He also displaced Michael Jordan, becoming the second-richest African American in the United States — behind Oprah Winfrey.
It’s the latest accomplishment in a stellar 12 months for the leader of one of Silicon Valley’s budding software and technology investors. Last October, Smith and Vista closed a fund nearing $US6 billion, the firm’s biggest ever.
He also got hitched to Hope Dworaczyk, mother of his young son, in a wedding that can only be described as epic.
Check out scenes from the life of one of private equity’s rising stars:
Smith attended Cornell for undergrad but he never lost touch with Bell Labs. He continued to do work there as an intern during his summer and winter breaks before graduating Cornell with a chemical engineering degree.
Smith would go on to earn his MBA from Columbia University. Afterwards, he headed straight to Wall Street, taking a job at Goldman Sachs. 'When I finished business school and decided to join the tumultuous world of investment banking, my family and friends spoke up with concerns about my sanity,' he said in his American University commencement speech.
Smith would rise to co-head of enterprise systems and storage investment banking, advising on $US50 billion of deals from 1994 to 2000.
Smith left Goldman Sachs in 2000, where he worked on tech M&A, and launched his own private equity firm. In the 15 years since, Vista Equity Partners has generated outsized returns for investors and grown to nearly $US16 billion in assets, according to Forbes. It is considered to be one of private equity's up-and-coming firms.
'When I left my post at Goldman Sachs just after we had gone public to set up a private equity firm called Vista Equity Partners…my mentors and colleagues at Goldman thought I had lost it,' he said in his speech earlier this year.
'I was never mad at those folks, in fact I'm grateful for their advice and concern. In their caution, I found my courage. In their doubts, I found my resolve. In their warnings, I found my voice and chartered my own journey.'
Silicon Valley may be best-known for billion-dollar-valuations and soaring real estate prices, but Smith's strategy is practically contrarian: he's investing in software and technology companies that aren't in the least bit flashy. The New York Times recently called Vista's hiring strategy 'decidedly unusual' for how it uses tests to whittle down candidate lists.
In the years since Vista's founding, the firm has generated bumper returns for investors and gradually increased assets under management. Smith's fund collected nearly $US6 billion for its most recent fund, despite only setting out initially to collect less than $US4 billion.
Smith's strategy -- as well as his work ethic -- have won him praise on Wall Street. He's the 'antithesis of (Blackstone CEO Steve) Schwarzman,' a tech industry banker told Business Insider. The banker went on to praise Vista, as well, saying 'there is no shortage of PE shops that have succumbed to style-creep and/or chasing fleeting trends, but Vista has remained focused on enterprise software and technology.'
Another banker told Business Insider that Smith was 'one of the smartest men I've ever met.'
This summer, Smith married Hope Dworaczyk, a former Playboy playmate and mother of his young son. The two celebrated by renting out the Hotel Villa Cimbrone in Italy and putting on a star-studded display that included entertainment from Seal, John Legend and Bryan McKnight.
With his arrival at the #268 spot on Forbes' list, Smith moves into elite company. He's the second richest African American, only trailing Oprah Winfrey, and displaced NBA Hall of Famer Michael Jordan in the magazine's rankings. When he took an investment from Dyal Partners, Neuberger Berman's private equity unit, in Vista, it valued his firm at $US4.3 billion. Smith still controls a majority stake in Vista.
Smith said that being African American in private equity has caused him difficulty: 'I know that's the reason certain limited partners don't back us,' he told the New York Times.
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