Seth Klarman
Seth Klarman is one of the most respected and private figures in the investment world. He founded Baupost Group in 1982 with just $27M in capital from Harvard's endowment and four families, and has grown it into one of the largest hedge funds in the world. Unlike most hedge fund managers, Klarman frequently holds significant cash — sometimes 30–50% of the portfolio — waiting for compelling opportunities rather than forcing capital to work. Baupost has historically held illiquid and complex assets alongside public equities.
Klarman is the author of 'Margin of Safety,' a 1991 book on value investing that is so sought after it sells for over $1,000 on the secondary market. The book articulates his core philosophy: obsessive focus on downside risk, insistence on a large margin of safety between price and intrinsic value, and the patience to wait years for opportunities. He is deeply skeptical of market efficiency and the financial establishment, and has been a consistent voice warning about the risks of central bank intervention and excessive leverage.
The single greatest edge an investor can have is a long-term orientation. Most of Wall Street is focused on this quarter. If you focus on three to five years, you have very little competition.
— Seth Klarman, Baupost Group