Distressed debt and Appaloosa
David Tepper's fortune comes from Appaloosa Management, the investment firm he founded in 1993. Appaloosa specialized in distressed investing: buying the bonds, loans and shares of companies in financial trouble when other investors were selling, and profiting if those companies recovered. Tepper had learned the trade at Goldman Sachs and brought a reputation for detailed credit analysis and a willingness to buy when markets were in panic.
The firm made large gains in several downturns. It bought the debt of troubled Asian borrowers around the financial crisis of the late 1990s, invested in bankrupt companies such as Conseco and Marconi in the early 2000s, and profited from the recovery in the debt of energy and telecommunications companies that had collapsed after the dot-com bust.
Its most famous trade came in early 2009. As banks' shares and debt fell to very low levels during the financial crisis, Tepper bought heavily into Bank of America, Citigroup and other financial companies, betting that the government would not let them fail. When markets recovered later that year, Appaloosa had one of the best years in hedge fund history. Fees and returns on his own capital, much of which he kept in the fund, built his wealth.
Appaloosa, the Panthers and Charlotte FC
In 2019 Tepper announced that Appaloosa would return outside investors' money over time and become a family office, managing mainly his own fortune. The firm continues to invest actively, with stakes in large listed companies and a reputation for occasional well timed bets, including buying Chinese technology stocks in 2024.
His other major holdings are in sport:
- Carolina Panthers, the National Football League team based in Charlotte, which he bought in 2018 from the team's founder Jerry Richardson
- Charlotte FC, a Major League Soccer team he founded after winning an expansion franchise in 2019, which began play in 2022
Before buying the Panthers he had been a minority owner of the Pittsburgh Steelers, his hometown team, a stake he had to sell to take control of the Carolina franchise. As owner he has invested in the team's facilities and has discussed a new or renovated stadium with the city of Charlotte.
He also owns homes in several states. He moved his legal residence and his firm's headquarters from New Jersey to Florida in 2016.
Pittsburgh, Carnegie Mellon and Goldman Sachs
David Alan Tepper was born in 1957 in Pittsburgh and grew up in a middle class family in the East End of the city. His father was an accountant and his mother a teacher. He studied economics at the University of Pittsburgh and graduated in 1978.
After a short spell working at a bank in Pittsburgh, he earned an MBA at Carnegie Mellon University's business school in 1982. He then joined Republic Steel in Ohio, working in the treasury department, and moved to Keystone Mutual Funds in Boston.
In 1985 he joined Goldman Sachs, where he became head trader on the high yield bond desk. He specialized in companies in bankruptcy and other special situations. He left Goldman in 1992 after he was passed over for partner and opened Appaloosa the following year with a small group of colleagues.
Gifts to universities and community causes
Tepper is a major donor to Carnegie Mellon University. In 2004 he made a gift to the university's business school, which was then renamed the David A. Tepper School of Business. He later made another large gift to fund a new building for the school, the Tepper Quad, which opened in 2018.
Through the David Tepper Charitable Foundation he has supported food banks, education and health programs in New Jersey, Pittsburgh, Charlotte and elsewhere. He has also given to the University of Pittsburgh and to medical research.
He signed the Giving Pledge, committing to give away most of his wealth during his lifetime or at his death. In the Carolinas, the Panthers and Charlotte FC have run community programs on youth sports and education. Tepper is known for blunt public comments on markets and on the economy, though he gives interviews only occasionally.