right arrow
Examples: Monday, today, last week, Mar 26, 3/26/04

Hedge-Fund Father Uses $31M to Hedge Kids' Chances at Elite Schools

DustyfeathersDustyfeathers 3355 replies77 threads Senior Member
Okay so we all have heard about direct payments to get Susie-P-Q or Benjie-Bob-Lou into Dream College. Many of those families were caught under Operation Varsity Blue and some parents are serving time in jail as a result

The parent in the linked article makes that look like child's play. The article alleges that the father hedged all aspects of the children's lives--they didn't realize that the family owned several apartments in the building all staffed with assistants who smoothed their paths throughout the day . . . . for example.

The father spent about $31M sending donations to the top schools so that his children would be able to choose their Ivy like ordering from a take-out menu.

Happy reading!

https://www.propublica.org/article/hedge-fund-billionaires-donations-college-admissions-elite-universities
20 replies
· Reply · Share

Replies to: Hedge-Fund Father Uses $31M to Hedge Kids' Chances at Elite Schools

  • lookingforwardlookingforward 34475 replies382 threads Senior Member
    I'm not aghast.

    And to add to his dollar impact, with those select few schools, he likely signed a contract with a target total donation specified, over x years.

    I just wanted to comment before the conspiracy theories take over.
    · Reply · Share
  • CottonTalesCottonTales 1298 replies21 threads Senior Member
    I have to laugh at his strategy. It's like playing craps and playing across the board.
    · Reply · Share
  • twoinanddonetwoinanddone 23237 replies17 threads Senior Member
    I think he likes to support education and picks the schools of his employees, since he only seems to hire (even mail boys) from those school.

    Poor UCSD - no big bucks for UCSD?
    · Reply · Share
  • privatebankerprivatebanker 5332 replies77 threads Senior Member
    He sounds like so much fun to be around, the life of the party.
    · Reply · Share
  • itsgettingreal17itsgettingreal17 4043 replies26 threads Senior Member
    Why not just split the 31M among his children? With that kind of money, the kids don’t need college let alone a top school.
    · Reply · Share
  • privatebankerprivatebanker 5332 replies77 threads Senior Member
    No cool sweatshirt to wear announcing his parental and genetic greatness to go with his super hip cargo shorts at the Davos summits.
    · Reply · Share
  • sushirittosushiritto 4130 replies12 threads Senior Member
    I love this.
    Starting in 2011, when the oldest of their three children was about two years away from applying to college, the Shaw Family Endowment Fund donated $1 million annually to Harvard, Yale, Princeton and Stanford and at least $500,000 each to Columbia and Brown. The pattern persisted through 2017, the most recent year for which public filings are available, with a bump in giving to Columbia to $1 million a year in 2016 and 2017. The foundation, which lists Kobliner as president and Shaw as treasurer and secretary, has also contributed $200,000 annually to the Massachusetts Institute of Technology since 2013.

    Tiered donations. I’m surprised the UChicago folks aren’t “up in arms” about this. :lol:
    · Reply · Share
  • lookingforwardlookingforward 34475 replies382 threads Senior Member
    ^ 2 or 3 mil can be small potatoes. I'm no expert on hedging, but it seems like a drop in the bucket,no? A small wager.
    · Reply · Share
  • privatebankerprivatebanker 5332 replies77 threads Senior Member
    edited September 28
    It’s like buying fancy presents for 8 pretty girls to see which one likes you the most. And the value of the presents are determined by the perceived order of attractiveness.
    edited September 28
    · Reply · Share
  • privatebankerprivatebanker 5332 replies77 threads Senior Member
    I also just changed my mind on the billionaire tax due to this db.
    · Reply · Share
  • doschicosdoschicos 21393 replies223 threads Senior Member
    Why not just split the 31M among his children? With that kind of money, the kids don’t need college let alone a top school.

    That's nothing for a billionaire. Plenty more where that came from for his children, right?


    No surprises here, IMO. When you are in that stratum of wealth, money does buy things - development cases in college admissions, smoothing the path for you and your loved ones. Nothing new at all.

    Plus, those colleges are benefitting from generous contributions. At least he's gifting some of his wealth. It'll fund nice things or FA for many students.
    · Reply · Share
  • Groundwork2022Groundwork2022 2344 replies43 threads Senior Member
    Well, he has his quirks for sure, but if I had his money, my daughter would be a "development case" too. Not in Varsity Blues style, but in the development-office-conducts-admissions-interview-over-lunch style.

    Seriously, $31 million buys a lot of scholarships. Rather than a silly dance with development, I don't see why these schools don't auction off a couple of seats each year. Bidding can be restricted to those with a minimum GPA and test scores (which could be lower than the college's numbers at large, though) - and anonymous to protect the safety of the student who wins the spot as well as. Amount of the winning bid would be published, and all money would fund the following year's scholarships.
    · Reply · Share
  • ucbalumnusucbalumnus 78553 replies695 threads Senior Member
    To fill its storied ranks, D.E. Shaw & Co. depended on the same criteria elite colleges use in their own admissions processes. No matter one’s age or status, every applicant — from secretarial workers to traders lured from top mathematics and physics departments — had to submit their SAT scores. “It was incredibly insulting to recruit professors from MIT and ask them for their SAT scores and high school GPA,” a recruiter recalls. “They would be like, ‘I’m a tenured professor, why are you asking?’”

    Really odd when considering applicants who have graduated college.
    Others questioned whether Shaw’s donations were intended to gain an edge for his children. Mark Lipton, a professor of management at the New School who has worked with the hedge fund, said that while Shaw cares deeply about his family, “he’s a real meritocracy fan. My hunch is that he invests in his kids from Day One so they can get in at these schools on their own. What’s so self-evident, whether it’s for his own kids or not, is the extraordinary importance he puts on the best higher education.”

    Seems like he was purchasing for his kids additional or enhanced opportunity to acquire merit.
    · Reply · Share
  • suzyQ7suzyQ7 3975 replies55 threads Senior Member
    edited October 18
    Thanks for posting - really interesting article. The waste described in this article bothers me probably more than anything else. Purchasing duplicate flights to make sure that the flight was going to be efficient and comfortable for Mr Shaw is ridiculous to me. Donating a bunch of money from his foundation to colleges his children may want to attend is more palpable then having an apartment of people living upstairs that are planning the quality of a rug for one of their kids bedrooms, etc- that is astonishing. I wonder how well-adjusted these kids grew up living in that kind of environment.

    There wasn't a lot of information on what people thought of him on a personal level (outside of his neurotic over-researching behavior). Did his staff think he was a good person? Is he a narcissist? I wonder how much the kids knew and know now about the family dynamic. it must be tough for the youngest one to have an article like this out on the internet and be a high school/ soon to be college student.
    edited October 18
    · Reply · Share
  • eb23282eb23282 583 replies16 threads Member
    Meh, not really news as far as I'm concerned. And the article supports that too...
    from a hedge funder’s perspective, investing in multiple colleges is a classic asymmetric bet — one with minimal risk and massive potential upside. “For someone of his mentality, making a portfolio bet would make a lot of sense,” said one former Ivy League development officer. “I can tell you that within the hedge-fund community and private-equity community, this wouldn’t be unusual. It’s common for people to be giving to two or three or four schools.” (Just how many of these donations are made is hard to know because, while those from foundations like the Shaws’ are typically publicly reported, gifts from individuals are not.)

    As Parke Muth, an independent counselor and former associate dean of admissions at the University of Virginia, explained, the very wealthy “are accustomed to diversifying their investments, and they apply that same philosophy to their kids’ choices.”
    · Reply · Share
  • makemesmartmakemesmart 1589 replies14 threads Senior Member
    Life is always better than fiction- lol and thank you for posting this, made my first really cold Friday morning fun!
    “ At one point in the aughts, of the five employees in the D.E. Shaw mailroom, three had degrees from Columbia and one was a concert pianist from Carnegie Mellon, according to a former worker.” - you can’t make this stuff up. 😂
    · Reply · Share
  • TiggerDadTiggerDad 1934 replies71 threads Senior Member
    Shouldn't this be posted in: "You just can't make this stuff up! The crazy news of the day thread"?
    · Reply · Share
  • PublisherPublisher 8507 replies91 threads Senior Member
    It's not crazy if it makes one a multi-billionaire.
    · Reply · Share
  • northwestynorthwesty 3540 replies9 threads Senior Member
    "I also just changed my mind on the billionaire tax due to this db."

    Stop with the socialist BS.

    Do you have any idea how much it costs to put a glass-lined empty moat around your whole house? Since I just had my own anti-tick moat installed, I can tell you it ain't cheap.

    $100 million a year just doesn't go that far these days. $31 million in donations, tick moat, Ivy League nannies. There's almost nothing left to pay Lizzie's wealth tax.

    · Reply · Share
  • houndmomhoundmom 320 replies11 threads Member
    Ugh. If I ever feel compelled to write a two+ page essay regarding "how to stop by my office" please commit me immediately.

    He sounds so exhausting. Can't imagine being his family.
    · Reply · Share
Sign In or Register to comment.

Recent Activity