(Bloomberg) -- David Bonderman, the colorful yet publicity-shy co-founder of private equity titan TPG Inc. who became a billionaire by spearheading massive company takeovers, bailouts of foundering enterprises and splashy investments in startups, has died. He was 82.
Bonderman died on Wednesday, according to a statement from his family and TPG. A cause of death wasn’t cited.
Bonderman was a leading member of a generation of financial entrepreneurs who built fledgling buyout shops into Wall Street powerhouses. Others include Henry Kravis, Steve Schwarzman and David Rubenstein.
TPG, the firm he started with Jim Coulter in 1992, had $239 billion of assets under management as of Sept. 30, 2024.
Bonderman had an eye for unconventional bets. “Returns tend to be better in places where either the troops are in the street, or the prices are low,” he said of his investing approach.
He drew skepticism with his first big deal in 1993, leading the $450 million recapitalization of Continental Airlines during its second bankruptcy. TPG — known then as Texas Pacific Group — netted a ninefold profit when it sold its stake in the airline.
Other unloved brands that drew TPG’s interest and money were airlines US Airways and America West, clothier J. Crew and music instrument maker Fender. As a venture investor, Bonderman and his firm made early and successful bets on Airbnb Inc., Spotify Technology SA and Uber Technologies Inc.
“David is a contrarian par excellence,” Clive Bode, a TPG partner, said in a 2016 video paying tribute to Bonderman’s corporate citizenship. “He likes complex, ridiculously treacherous transactions. Neither complexity nor difficulty dissuades him.”
In the case of Uber, Bonderman joined the board of the ride-hailing company in 2013 after his firm partnered with Google Ventures on a $258 million financing round. Uber co-founder Travis Kalanick requested TPG’s involvement so that Bonderman could help the company address a long list of regulatory challenges around the world, Brad Stone wrote in The Upstarts (2017).
Bonderman had a net worth of $4.4 billion, according to the Bloomberg Billionaires Index.
Unconventional Path
Bonderman’s career path was winding and unconventional. Before entering finance, he was a lawyer who scored wins in landmark cases related to insider trading and historic preservation. He had traveled the world and learned multiple languages. Earlier, while in college, he worked as a security guard on the night shift at Seattle’s Space Needle.
Known as Bondo to his friends, he flouted the image of the sleek-suited financier, arriving at meetings in khakis and loud, mismatched socks.
He once holed up for weeks on a superyacht off the coast of Australia while authorities sought to question him over a $700 million tax bill. In 2004, he said comparing US President George W. Bush to an oft-ridiculed predecessor, Millard Fillmore, was an insult — to Fillmore.
At a 2007 conference in Hong Kong, according to the Financial Times, he criticized the Japanese for being slow to make deals and added, “They hate us, but that’s OK because we hate them too.” Over objections from the Obama administration, Bonderman attended annual investment conferences in St. Petersburg hosted by Vladimir Putin in 2014 and 2015, following Russia’s 2014 invasion of Crimea.
In 2017, Bonderman resigned under pressure from Uber’s board after he cracked a sexist joke during a companywide meeting on an internal investigation into alleged sexual harassment within the company. The investigation resulted in Kalanick stepping down as CEO.
Bonderman said his comment “came across in a way that was the opposite of what I intended, but I understand the destructive effect it had, and I take full responsibility for that.”
Birthday Bashes
He was an ardent conservationist, a rock music fan who hired the Rolling Stones to perform at his 60th birthday bash and Paul McCartney at his 70th. Vacation was a time to indulge his thirst for non-Western cultures and remote climes.
He would log hundreds of hours annually on his private jet, which he’d trade in every few years for a new model. In addition to a 536-acre estate in Snowmass Village, Colorado, he owned a beachfront resort on St. Barts in the Caribbean.
“He’s a brilliant man, and I don’t give that label easily,” Tony James, a longtime friend and former executive vice chairman of rival Blackstone Inc., said in a 2017 interview. “He likes deals that are creative and he’s prepared to do things that others aren’t.”
Bonderman was born on Nov. 27, 1942, to a Jewish family and grew up in Los Angeles in modest circumstances before heading to the University of Washington, where he graduated in 1963 with a degree in Russian. After completing his law degree in 1966 at Harvard Law School, where he was a member of Harvard Law Review and graduated magna cum laude, he spent a year traveling in Africa and India.
He spent two years teaching law at Tulane University in New Orleans and worked briefly in the Civil Rights Division of the Justice Department in the waning months of Lyndon B. Johnson’s presidency. After studying Arabic and Islamic law in Tunis and Cairo, he was hired by the prominent Washington law firm Arnold & Porter in 1971.
He served as chief counsel for the bankruptcy restructuring of Braniff International Airways and represented Ray Dirks, a securities analyst censured by the Securities and Exchange Commission, before the US Supreme Court. In a 1983 ruling that reshaped insider-trading law, the justices agreed with Bonderman that Dirks hadn’t committed wrongdoing when he alerted clients to an elaborate fraud by a public company he’d heard about.
Bonderman famously told the justices during arguments, “The problem with the SEC’s theory is that it’s wrong.”
Grand Central Station
Bonderman also won notice for his work in historic preservation law. His friend-of-the-court brief on behalf of the National Trust for Historic Preservation and likeminded groups played an integral role in saving New York City’s Grand Central Station. On behalf of a local group, Don’t Tear It Down, he was the principal author of the 1978 District of Columbia law that guides preservation of non-federal landmarks in the nation’s capital.
“In any ranking of America’s most respected preservation lawyers,” Bonderman “is a serious contender for the best,” reported a 1983 article in the magazine of the National Trust. It said he had won 19 of 20 preservation-related cases, “often prevailing in lost causes.”
One of his successful preservation battles — against rebuilding and widening an elevated interstate interchange in Fort Worth, Texas — was on behalf of a local group led by Robert Bass, one of four wealthy dealmaking brothers, and his wife, Anne. Impressed, Bass hired Bonderman — and his thin resume in high finance — in 1983 to lead his private investing arm.
The family office’s team boasted other future deal-industry luminaries, including Coulter; Tom Barrack, who became chairman of real estate investor Colony Capital Inc.; and John Grayken, who went on to lead private equity firm Lone Star Funds. Their most memorable score was the 1988 purchase of American Savings & Loan, the nation’s biggest failed thrift, during the S&L crisis. They spent just $400 million, thanks to billions in federal assistance to complete the acquisition. Eight years later, Washington Mutual Inc. purchased the lender for $1.2 billion.
In nearly a decade as Bass’s chief investor, Bonderman earned him an average annual return of 63%, the New York Times reported.
In 1992, Bonderman and Coulter paired up for a deal of their own, rounding up $66 million from an ad-hoc group of investors for the takeover of Continental, in partnership with Air Canada. The two men founded TPG in Fort Worth, where Bonderman lived at the time, and San Francisco, Coulter’s home.
Partnership of Opposites
The partnership of opposites — Bonderman the gambler, and the chary Coulter, 17 years his junior — flourished. TPG was among the first US private equity firms to test the Asian and Latin American markets while it bet on damaged domestic companies such as Oxford Health Plans and MEMC Electronic Materials Inc., often with stellar results.
After taking heavy losses on three megadeals in 2007 and 2008 — acquisitions of utility Energy Future Holdings Corp., casino operator Caesars Entertainment Corp. and savings bank Washington Mutual, months before it was seized by regulators — TPG recalibrated its approach.
It focused on smaller, growth-oriented buyouts such as Cirque du Soleil Inc., Viking Cruises Ltd. and Creative Artists Agency LLC, and later-stage venture investments including Vice Media Group.
In 2016, the firm’s credit arm teamed with Dragoneer Investment Group to help music-streaming service Spotify raise $1 billion in a convertible-debt transaction. The deal proved lucrative when the backers later sold equity to Chinese internet giant Tencent Holdings Ltd.
TPG went public in 2022, following years of hints from Bonderman that it would, in an offering that valued the company at $9 billion.
Bonderman set up a family office, Wildcat Capital Management, located in New York. In one wager, the firm reaped a profit of at least $425 million when Gilead Sciences Inc. acquired a biotech company it had taken a stake in. Wildcat opened up to other wealthy investors in 2022.
Bonderman led founding ownership group of the Seattle Kraken, which joined the National Hockey League in 2021. The following year, his daughter, Samantha Holloway, became a co-owner and succeeded him as chair of the franchise’s executive committee. Bonderman also was part of the ownership syndicate of the Boston Celtics of the National Basketball Association.
He served on the governing bodies of the Wilderness Society and the Grand Canyon Trust, the University of Washington Foundation and the American Himalayan Foundation. Through his Wildcat Foundation, Bonderman supported anti-poaching and other wildlife conservation efforts in Africa.
With his wife, Laurie Michaels, a clinical psychologist and philanthropist, Bonderman had five children.
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