The Midas touch
Alberto Vilar throws his money around
On the plane, crossing the Atlantic, I thought: How can I get some money from Alberto Vilar?
As the world’s most successful investor in new technology, Vilar possesses a magical power: he transforms what he touches into gold. His reputation is so strong, he can virtually ensure a company’s success just by buying its shares. He was the first to buy Microsoft, for instance, and AOL and Yahoo! And he wasn’t slow to spot Netscape, Cisco, Intel, among others.
Through his investments, Vilar has become stunningly rich (worth “obviously several hundred million dollars”, by his own account), and subsequently transformed himself into a world-conquering philanthropist. He’s chucked cash at his alma mater, haemorrhaged it over hospitals, and – most impressive of all, his philanthropic USP – he’s scattered it throughout the world’s leading opera companies.
Perhaps he might reward me if I sing? Or if his ear is good, if I don’t?
Then again, how about this. Maybe Vilar will pay me to write a libretto for a new opera. I’ve already thought of a subject: Midas, mythical king of Phrygia, first possessor of the golden touch, who set himself up as a music expert when he judged a contest between Pan and Apollo.
This Midas thing, I tell myself, it’s a cert. And that’s before I step inside Vilar’s apartment – four apartments, knocked into one, in midtown Manhattan – a lavish space crammed with gold couches, gold structural columns and, in some rooms, gold wallpaper.
But I’ll have to choose my moment, because Vilar has something on his mind. Collecting me from the front door, Vilar marches across his marble halls towards a picture window and points west towards the Chrysler Building and the Empire State. “This is a piece of history,” he says, but he’s not talking about those well-known skyscrapers. The building that exercises him is the new Trump tower shooting up across the road, nine floors high, topped by cranes and surrounded by American flags. To a visiting Brit, it seems odd that this could be historic. Another tall building in Manhattan: so what? But Vilar isn’t happy – this concrete shell threatens eventually to reach 70 floors high and obscure his view. “I’m leading the litigation.”
It’s not personal, he insists, taking a seat before a dish of pastries and a jug of coffee. His view, after all, extends around 270 degrees – north, west and south – and Trump’s building will only occupy a small fraction of that (“I majored in math,” he reminds me). No, the motivation for opposing Trump runs thus: “There are days when you can’t go out there because of the wind off the East River, and the laws of physics will play havoc with that. Also, there is the question of reflection… This is about one guy’s ego.” (Making this bold claim, Vilar uses for the first time what turns out to be a habitual, nervous gesture: he raises his right hand to the frame of his specs and lifts them slightly. This puts me in mind of the comedian Eric Morcambe – except Vilar, you can be sure, is not trying to be funny.) “Mr Trump does not build for New Yorkers. It’s generated an enormous amount of opposition. The head of the UN’s against it, I’m against it, and thousands of people have given us $5 each.”
You or me, faced with some ghastly development, would complain to the council, maybe write to the papers. Vilar, if he cares at all, finds himself obliged to spend hundreds of thousands of dollars. For philanthropists, it’s like that: they’re always in danger of being sucked into the management of cities. But there are limits: “I’m not a charity for the disenfranchised,” Vilar argues. “That’s for the government. I like to help the performing arts.”
The principal beneficiary of his largesse has been New York’s Metropolitan Opera, where Vilar is a managing director. He gave $26m to the endowment campaign (the largest ever donation); he’s underwritten new productions of Cosi Fan Tutti, La Cenerentola, Le Nozze di Figaro and La Traviata (to the tune of $2 million per production), and pledged as much as $20 million for more new productions. On top of that he’s put up millions of dollars for new productions at The Salzburg Festival, The Kirov, and Glyndebourne. The Vilar Centre for the Arts in Colorado secured $10m, and for a new underground theatre at New York’s Carnegie Hall Vilar promised $2.5m.
Then there’s Covent Garden, which has been promised £10m towards the costs of the new building, and three new productions. “I told the Met I would give 10 operas. I’m giving three to Covent Garden – and if they don’t do a good job they won’t get more.” In recognition of this gift, the reconstructed Floral Hall which forms the main foyer will be named in his honour. In his office Vilar shows me a pasteboard facsimile of the plaque due to be unveiled at a private ceremony a week later: “Vilar Floral Hall / Dedicated to / Her Majesty Queen Elizabeth / the Queen Mother / generously supported by Alberto Vilar”. The name will be his in perpetuity. “If the place burns down and they rebuild it, I still get that,” he says firmly.
(He’s not so strident, a week later, at the ceremony. The Queen Mother, in peacock blue, works her way through a queue of dignitaries while Vilar stands alone in front of his curtained plaque. He looks terribly nervous, hands clasped behind his back and thin lips set rigid: as an image of the loneliness of philanthropists – of which he talks a lot – this is hard to beat. But when the ceremony’s over, Her Majesty grasps his hand in thanks and they sit side by side for a brisk performance from the House orchestra’s lead violin.)
The telephone rings, and Vilar answers it. I take the opportunity to study his bookshelves. Glossy tomes on opera, Verdi and Faberge stand side by side with Soros on Soros and Being Digital. Vilar contributes little to the phone conversation – for at least five minutes he doesn’t even say “hmm” or “uh-huh” – but eventually he scribbles an explanation for my benefit: V-a-l-e-r-y G-e-r-g-i-e-v. Vilar is backing the Kirov’s touring production of War and Peace. “They’ve had 80 per cent cut from government funding,” he explains when the one-sided call finishes. “They only have me there holding it up.”
If you didn’t already know about Vilar’s interest in music, it wouldn’t take long to guess. His necktie features golden musical instruments against a navy background. A $200,000 sculptured glass dining table features instrumental details at its centre. Behind that, a wall has been decorated in white and gold to resemble the Mozarteum in Salzburg. Chandeliers, by Lobmeyr, are replicas of the ones at the Met. There’s a life-size statue of Mozart’s Don Ottavio, masked and caped, and another of young Mozart, identical to the one in London’s Ebury Square. And that’s just one room.
On the lower floor, he’s building a concert room to accommodate 55 people. “I know a lot of singers, I entertain them here. I’m a good neighbour. I play my music – I have a Bang & Olufson system that works in 11 rooms – but [the neighbours] can’t hear it.” Somewhat to my surprise, he says he listens while he works. “Sure. I read for four hours a day, and you can’t do that with rock.” But that’s hardly respectful, to use classical music as wallpaper. “I sometimes stop when I know an aria is coming.”
Does he sing? “No. If I had something in the car I will maybe sing that.” (He’s a baritone). “I’m under no illusions, God did not bless my vocal chords. But I did sing at school. I liked music when I was seven. I wasn’t good at sports – I was really an anti-social child – I used to lock myself in a room and listen to music, pretend I could conduct. I knew the whole score for several things, like Tchaikovsky and the Emperor Concerto.” His father did not encourage this. “My dad was a nice man, but he really was a bad influence on my artistic development. In those days you did not want your son to be an artist. Most people want a sports fan who goes chasing girls. I was shy, a religious bookworm, an altar boy.”
Unasked, Vilar suddenly asserts that he’s heterosexual – worried, presumably, that I might misread his account of childhood introversion. He was married, for five years, to a German woman raised in the US. “I was interested in having a family,” he says with disarming frankness, “but we couldn’t. I really regret not having children. I would have been a really good father. I do take an interest in children, not just write the cheques.” (He’s made enormous contributions to young artists programmes at Covent Garden, the Met and the Kirov.)
Nowadays, he shares his life with a woman in her 30s, whom, loitering in the background, I had taken for another member of his staff. Only when Vilar shows me round the apartment do I divine their relationship. The giveaway is when we find her standing in the bedroom – an oval bath in one corner, and a large bed diametrically opposite, surrounded by mirrors on a rotating platform. Vilar, suddenly playful, shows me a wind-up toy in the likeness of a nun: “This is what Petra was before I met her!” Soon afterwards, he smiles coyly at her as he outlines plans to convert adjacent space into a “female changing area”. (Uncertain how to respond to either of these disclosures, I give a non-committal “Ah!”)
Vilar was born in New Jersey in 1940, while his family was on a business trip from Cuba (his father was big in sugar). Eighteen years later, he returned to the US to study economics in Washington, Pennsylvania. By the time he graduated, Fidel Castro’s revolution had put an end to his expectations of joining the family business. “I went from riches to rags.”
Hoping that Castro wouldn’t last long, Vilar’s father instructed him to study finance. So he joined Citibank, which sent him to work in Latin America. But after three years he decided Castro would not be removed after all, and returned to Wall Street.
“I was a good money manager from the beginning,” he says. (In Vilar’s business, boasting is polite: nobody can hope to manage vast pension funds if they sound tentative or modest.) The real breakthrough occurred in the late 70s, at a presentation on the new semiconductor industry: “I said, ‘this is going to change the world, I’m willing to bet the farm’.” In 1980, he set up Amerindo Investment Advisers Inc to manage institutional portfolios exclusively invested in emerging technology.
While we’re talking, he shouts into the kitchen in Spanish (Vilar’s housekeeper, Pilar, has worked for him for more than 20 years). The fluency surprises me: his spoken English is so natural and uninflected that I’m inclined, momentarily, to congratulate him on his Spanish. Have his Cuban origins ever caused problems? “If I had not spoken English when I came here, how far would I have got?” He pauses to think. “People want to be sure that the person looking after their money was a ‘good old boy’. A lot of people just thought I had a funny name.”
Vilar believes the internet will have an impact equal to the introduction of electricity, the telephone, railways and cars. Over the next few years, he believes, the number of net users will double to 280 million people, and this will be accompanied by a huge shift in business-to-business e-commerce. His visionary credentials are impressive: “When Microsoft came to me they had an operating system for PCs but there were no PCs at that time. It was like a guy had gas but there were no cars. It took seven to ten years for that stock to make money.”
Today, Amerindo manages investments totalling more than $4 billion. Its clients comprise some of the largest pension funds in the United States and England. Additionally Amerindo, which has offices in San Francisco, New York and London, launched three years ago its own Amerindo Technology Fund for retail investors. It’s been more successful than even Vilar could have imagined: in the year to August 31 it climbed 384.7 per cent – the highest 12 month return since Lipper Company first measured the performance of US equity funds in 1959.
Amerindo’s investment portfolio comprises a surprisingly small number of holdings, each of them large stakes in growing companies. That selectivity helps to explain the fund’s potency: “Having Amerindo as an investor was almost like an endorsement,” one company director told Investment News in October. “It said, ‘this is a company with the legs to go public’.”
But with so few stocks in the fund, critics argue that would-be investors could save themselves Amerindo’s fees by buying those few stocks directly. Vilar says that would be impossible: nobody understands the market as well as Amerindo. “For example, there are two companies [in the fund] you’ve never heard of. One, Ariba, I bought at $3 a share and it’s now $215. And a year ago I bought shares in a new company called Sycamore for $2.55 which are now worth $200. How would the public know about those?”
Would he buy into an English internet company? “Please be objective, because people will say ‘Oh, that arrogant guy!’ but the truth is that Europe is three to five years behind the US. Companies like Yahoo! and AOL buy the little guys over there. Investing in technology in Europe has not been a good story.” (Nevertheless, Vilar admits he possesses shares in a company from Cambridge, the telecom-related Bookham.)
“Investing is an art. You have to have good judgement. We pick them very early – and we withstand the volatility.” That, he insists, is rare. “If you took 300 of the smartest people, none of them would hold onto stocks. They would say, Clinton makes me nervous; and Mr Blair and the Queen have said Mr Greenspan is going to raise interest rates. So they get rid of it. There is a concept in investing called Let Your Winners Run. The best thing you can do is hold on. We’re like a general who has been through three world wars – if someone pulls out a gun you have to be able to keep with it. I eat bullets for breakfast. If Mr Greenspan wakes up in a bad mood these stocks can move 20 per cent in a day. I need to have very good blood pressure.” Then comes the plug. “But for 17 years out of 19 my firm has ranked first or second. I have compounded at over 30 per cent a year.”
To hear Vilar speak in this vein is to understand why he manages to sound competitive even when discussing his philanthropy. His vocabulary is athletic, pugilistic. “The introductory music to Lohengrin is – pppf!” he says. “If that doesn’t turn you on, you have missed your sport.” He told the New Yorker, earlier this year, that he hoped to back certain Russian productions “but some others beat me to the punch”.
So there’s artistry to investment, and something dog-eat-dog about musical philanthropy. In which case, how come Vilar is so conservative about music when he’s such a risk-taking pioneer in investment? “I think that’s mixing apples and oranges,” he sniffs, before offering another interesting overlap between the two spheres. “There’s no great music being composed these days,” he asserts, “because smart young kids are all in computers”. (Perhaps to address that, he’s giving a computer centre to his old school, but also instituting visits by distinguished artists.)
Even in the US, philanthropists face occasional criticism. Vilar has given nearly $40m to the Met, but when his name was attached to the restaurant, the Vilar Grand Tier, there were mutterings. “They didn’t want to put the words in the lift. Someone didn’t like the sign – the size of it. I kicked up a fuss.”
With Covent Garden, the gift was his own idea. “No one came to me. I volunteered to come forward. I have been in the UK for 20 years and a number of friends there said don’t do this because they [the British press] will beat you up… I wish they would look at me not just as an American but as a philanthropist. It’s a bit like the Olympics – it’s not the country [that counts], it’s the person. You have to have a tough skin. It’s lonely being a philanthropist, there’s always going to be someone who calls you ‘that arrogant rich guy’.”
The way Vilar sees it, even those houses which don’t rely on private donors must answer to somebody. “If you are the Vienna Staatsoper,” he argues, “and the good government of Austria gives you the money – you still have to satisfy the bureaucrats. At Salzburg, people said to me they have to wait till the election to make a decision. You do pay something to the devil for public subsidy. Mr Blair may not turn out to love opera as much as the other guy, Norma Major’s wife [sic].”
Only one US president, he believes, has visited the Met – the current one. Vilar wasn’t impressed. “Hillary was good, but the President was ‘Zzz…’ I have been asked to support the Hillary campaign, which I might do.” (He’s not a Democrat, but Hillary’s probable Republican opponent, Rudolph Guiliani, is too close to Donald Trump for Vilar’s liking.)
For Hillary’s sake, I hope she’s better at asking for cash than I am. Like Covent Garden, I’m too British to ask. But anyway, it’s become pretty obvious Vilar won’t want my libretto: “Opera is about music, voice and then – the least important – the score, the staging and the libretto.” (That’s just as well, Vilar wouldn’t appreciate what happened to Midas after he judged that musical competition: Apollo, a bad loser, expressed his disappointment by replacing Midas’s ears with those of an ass.)
No, the fact is, I’ve been looking at Vilar through the wrong end of the telescope. Sure, it would be nice if he gave me a load of cash. You could say the same about anybody. But given the stunning rate of interest Vilar earns on his investments, I might even be happy giving some money to him.
Keywords: alberto vilar