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Scott Minerd Copyright Michael Loccisano, Getty Images
Scott Minerd

Guggenheim's Minerd Was a Wall Street Outsider Who Made It His Home

No other bond king could come close to bench-pressing 495 pounds 20 times over, as he did in his prime.

(Bloomberg) -- Nothing about Scott Minerd was typical Wall Street.

There was his upbringing: a humble son of an insurance salesman in Pennsylvania’s coal-mining region. There was the fact that the Guggenheim Partners chief investment officer was openly gay, a rarity for a top executive in the industry. And, of course, there was the bodybuilding — no other bond king could come close to bench-pressing 495 pounds 20 times over, as he did in his prime.

Yet to those who knew him best, Minerd, who died Wednesday at the age of 63, will be most remembered for far simpler attributes. A quirkiness that’s disarming in a 300-pound man. An intense love for his small, white, mixed-breed dog Gracie, who he shared with his husband, Eloy Mendez. The inability of anyone — and certainly not his media relations handlers — to keep him under wraps over a Laphroaig whiskey or two.

“I don’t like to do things half-way,” he once offered by way of explanation.

So while Minerd was certainly well liked on Wall Street — the legendary investor Bill Gross was among those who paid tribute Thursday — he wasn’t of Wall Street. Instead, he courted friends across the spectrum, from the president of Iceland to the actor Sylvester Stallone to Kerry Kennedy, the human-rights activist.

And anyone who met Minerd, with his robust physique, could probably have guessed that body building was among his favorite hobbies. He moved to California in his 30s partly to be closer to the scene in Venice Beach made famous by the likes of Arnold Schwarzenegger. He excelled at the sport and competed in the Super Heavyweight and over-40 divisions at Los Angeles bodybuilding championships.

Interesting insight from my friend, 7-time Mr. Olympia and former Governor of California @Schwarzenegger

— Scott Minerd (@ScottMinerd) January 6, 2021

But of course it was investing where he really left his mark. The $18 billion Guggenheim Total Return Bond Fund, Minerd’s biggest fund, outperformed more than 90% of its peers for most of the past decade before stumbling along with many other fixed-income portfolios this year.

While his market calls — made during frequent television appearances — weren’t always correct, they were rarely wishy-washy. And he put his money where his mouth was, as made clear during the unprecedented volatility of March 2020.

As the pandemic gripped the world, he leaned into the turmoil, frequently waking up between 11 p.m. and 2 a.m. to dump assets in the early weeks of the government shutdowns.

“It seemed to me that the world was totally asleep” to the risks of the pandemic, he said. More than 10% of his more than $200 billion portfolio was tied to the airline industry, so he had real reasons to worry.

But he was nimble. On the morning of March 23 — perhaps one of the biggest calls in his professional history — he put $7 billion to work in a single day buying assets including high yield debt as the US Federal Reserve piled into supporting markets in unprecedented moves.

It marked the start of a fierce bull market, and Minerd profited handsomely. 

Minerd’s path to Wall Street started in the mid-1970s, when he quit high school a year early to follow a girlfriend to Philadelphia. There, he persuaded the University of Pennsylvania to allow him to take courses at the Wharton School. 

After earning a degree in economics from Penn in 1980, he took classes at the University of Chicago’s Booth School of Business and then worked as an accountant for Price Waterhouse. He switched to investing, which paid better, and started climbing Wall Street’s ranks for the better part of a decade.

In 1992, Minerd generated a big win for Morgan Stanley by trading Swedish bonds after the country raised its interest rate to 500% to defend its currency. The next year he orchestrated a debt restructuring for Italy that helped stave off a bailout by the International Monetary Fund. He left Morgan Stanley for Credit Suisse First Boston in 1994, helping run the fixed-income credit trading group.

Minerd was shuttling between New York, London, and European capitals, but got tired of the second-guessers and corporate intrigue. He left the firm to resettle in California, chasing the sun, the food and the fitness culture.

He’d been away from the business for two years when Mark Walter, a former client who ran the investment firm Liberty Hampshire, came to lure him out of early retirement in 1998. Minerd had two conditions: He would retain his autonomy and remain in California.

Soon, Liberty merged with the family office of 19th-century mining baron Meyer Guggenheim’s heirs, transforming the little-known investment house into Guggenheim Partners, a boutique asset manager.

It was only in recent years that he started to cut back on the global travel he found so exhausting. He settled down with his husband in Rancho Santa Fe, where he enthusiastically cheered on the Los Angeles Dodgers. He had a second house in Miami, but couldn’t stand being there in the summer because it was too hot.

Minerd was also known for his charitable endeavors. He and Gracie were regulars every year at the Ripple of Hope dinner hosted by Robert F. Kennedy’s family. 

He also donated millions of dollars to the Union Rescue Mission in Los Angeles, according to Andy Bales, the president of the 132-year-old charity that offers shelter and counseling for the city’s massive homeless population. Minerd’s donations allowed the mission to keep shelters for women and children open after the 2008 Wall Street financial crisis and to open a new shelter recently.

“He was the Guardian Angel of the Union Rescue Mission,” Bales said in an interview. “He had the biggest heart of compassion in the world.”

Select remembrances:

  • Bill Gross, co-founder Pacific Investment Management Co.: “Scott was a fixed-income master — brilliant at deciphering intermediate and long-term changes in interest rates. He was a dear friend and supporter. I will miss him.”
  • Kerry Kennedy, president of Robert F. Kennedy Human Rights: “His life was one of service and purpose. Whether they be immigrants suffering abuse at the border, victims of LGBTQI-targeted violence halfway around the globe or homeless people on the streets in his own city, Scott was determined to give a leg up to those in need.”
  • Michael Milken, chairman of the Milken Institute: “He had a rare perspective on markets. But most often, we discussed our joint belief in the capacity of finance to be a force for the betterment of society. We shared an understanding that the most effective philanthropy calls for a commitment of time and insights, not just money. His personal dedication to many causes, especially foster care and the needs of the homeless, was inspiring.”
TAGS: Fixed Income
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