“Napoleonic”, “Machievellian”, Kanye Westian —
this wasn’t the kind of storyDan Loeb was hoping for.
In the new issue of Vanity Fair, William D. Cohan profiles the hedge funder, and the piece is as brutal as Loeb’s famously caustic activist “letters of mass destruction.”
It seems finance folks are eager to slam Loeb, who has made plenty of enemies throughout his meteoric rise, 2008 fall, and post-crisis boomerang. From Vanity Fair:
A Wall Streeter who has known Loeb since his early days in New York describes how Loeb climbed to the pinnacle of hedge-fund success: He started out “a little bit like J.P. — John Paulson [founder and president of the hedge fund Paulson & Co.]. He was doing O.K. No one took him terribly seriously. And then he kind of figured out his niche. We all know what his niche is: He is just long and loud. He took a position and then started screaming and trying to force some change. He was smart to occupy a place that was really left vacant: All the private-equity funds and the banks had to get out of [doing] hostile deals, and it was left to the guys who didn’t give a crap, knew how to do it, and had nothing that they were compromising or putting in jeopardy by taking on those powers. Carl Icahn didn’t give a fuck. Dan Loeb didn’t give a fuck. I don’t think anyone’s ever said Dan’s a really, really brilliant guy, but this is what the hedge-fund world allows you to be if you’re massively ambitious and you’re kind of really, really, really focused. You’ll probably get there.”
There’s a ton more of this kind of colour in the story itself, as it stretches from Loeb’s childhood, to his early days as a hedge fund manager posting vitrolic commentary on equities anonymously online under the pseudonym ‘Mr. Pink,’ up to his time as an activist now. Very much worth a read.
One of Loeb’s former friends willing to speak on the record was Robert Chapman, a hedge funder in California. He offers up the “juiciest” part of the piece about a little issue Loeb faced in Cuba in 2002:
In March 2002 there was a strange blip in Loeb’s biography, when he traveled to Cuba with his friend Alexander von Furstenberg (son of the designer Diane von Furstenberg, a Vanity Fair contributor) for what was supposed to be a long weekend. Things unexpectedly took a dark turn, and according to a lawsuit later filed by Youlia Miteva, a former Third Point analyst who accused Loeb of breach of contract, among other things, “Cuban authorities had refused to allow him to leave.” Asked what had happened in Cuba, Loeb told me earlier this year, for a previous Vanity Fair story, that he had been involved in a car accident, stuck around for a couple more weeks, had a legal hearing, and everything turned out fine.
According to Chapman, a desperate and sobbing Loeb had called him from Cuba, where he was confined to his hotel after the accident. “I remember how scared Dan sounded when describing the incident involving his hitting a local Cuban kid with his car,” recalls Chapman. “I truly felt so sorry for him when he told me he had found himself unable to leave the country, curled up in a ball on the floor of his room crying, promising God that he’d do anything if the Almighty got him out of his predicament. It wasn’t as if Dan had done it on purpose, and who really knows what ended up happening to the kid?”
It’s hard to know where the truth lies here. Loeb’s art dealer friend Christophe Van de Weghe told the New York Post that some versions of this story are bogus. “I was with Daniel Loeb in Cuba at the time of the accident and the period following. I state categorically that Daniel was never in jail . . . and that the child involved in the accident was not killed,” Van de Weghe told the Post. “These statements are malicious and defamatory.”
The Vanity Fair story burns either way.