Billionaires: Warren Buffett's portrait auction fails to match $19m lunch bid

In our fortnightly round-up of the world's super wealthy, MacKenzie Scott supports mentors for children with a $44m donation and Sam Bankman-Fried’s FTX and Alameda merge VC operations

Warren Buffett, chairman and chief executive of Berkshire Hathaway, celebrated his 92nd birthday by auctioning off a high-tech portrait of himself for charity. AP
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Warren Buffett

The auction of a high-tech portrait of Warren Buffett did not come close to matching the $19 million paid this year for a private lunch with the billionaire, but it raised $75,100 for one of his favourite charities.

The eBay auction was held on August 30, Mr Buffett’s 92nd birthday. The portrait, created by Motiva Art, features a grid of letters over the picture that light up to spell out 11 of the Berkshire Hathaway chairman and chief executive’s best-known quotes, including: “It’s only when the tide goes out that you learn who has been swimming naked.”

A previous portrait of Mr Buffett painted by performance artist Michael Israel in 10 minutes outside the Berkshire annual meeting attracted a $100,000 price in 2008.

The lunch auction Mr Buffett has staged for years to raise money for the Glide Foundation to help the homeless in San Francisco attracts big bids because it offers exclusive access to the investor who is willing to answer almost any question — except what he might buy next.

This year’s auction generated a remarkable amount because Mr Buffett, whose $100 billion fortune makes him the world's sixth-richest person, said it was going to be the last.

But he has auctioned off a number of unusual items over the years to benefit Girls Incorporated of Omaha, which provides educational, cultural and recreational programmes for young women in Mr Buffett’s home town.

The non-profit will receive all the proceeds from the art auction.

At one point, Mr Buffett raised $210,000 for Girls Incorporated by auctioning off one of his old wallets that contained a stock tip.

Girls Incorporated benefited when he sold a couple of his cars to buy upgraded models.

In 2015, a bidder paid $122,500 for Mr Buffett’s 2006 Cadillac that featured his signature on the dashboard. In 2006, Mr Buffett’s 2001 Lincoln Town Car sold for $73,200.

Mr Buffett also achieved a $2.2m donation for Girls Incorporated when he won a 10-year bet against a hedge fund manager that an S&P 500 stock index fund would outperform a collection of hedge funds after all their fees and expenses were factored in.

Mr Buffett has long said that most investors are better off regularly investing in a simple index fund instead of paying the high fees most investment managers charge.

MacKenzie Scott

Billionaire philanthropist MacKenzie Scott donated $44m to the Oregon-based mentoring organisation, Friends of the Children, which supports children at risk of entering the welfare system by pairing them with a long-time mentor.

The unrestricted gift provides $15m to the organisation’s national headquarters and splits $29m in direct donations to 12 of the organisation’s chapters from Tampa Bay to Detroit to Los Angeles.

Terri Sorensen, chief executive of Friends of the Children, said Ms Scott sent word through intermediaries about why she had chosen the organisation.

“She said that they were doing this because they really hoped more people would find out about Friends of the Children,” Ms Sorensen said.

That reflects what Ms Scott — who is the world's 37th richest person with a net worth of $32.1bn — has often said about her donations, writing in a 2020 Medium post that she and her team rigorously study organisations, in part, “to pave the way for unsolicited and unexpected gifts given with full trust and no strings attached”.

“Because our research is data-driven and rigorous, our giving process can be human and soft,” Ms Scott wrote.

The gift is the latest from Ms Scott to be made public and extends the pattern of her giving to other organisations that provide mentorship and support to children like Junior Achievement USA, Big Brothers Big Sisters of America and Boys & Girls Clubs of America.

Like nearly all of her more than $12bn in giving since 2019, Ms Scott’s donation to Friends of the Children was unrestricted. Her large gifts have challenged other wealthy donors and foundations to assess their giving strategies.

Ms Scott and her husband, Dan Jewett, donate in relative secrecy. Giving as individuals and not through a foundation means their donations are known only when the recipients disclose them or through her occasional blog posts.

Sam Bankman-Fried

Cryptocurrency exchange FTX has absorbed the venture capital operations of Alameda Research, an effort to consolidate parts of billionaire Sam Bankman-Fried’s empire as it copes with a prolonged decline in cryptocurrency prices.

Alameda chief executive Caroline Ellison outlined the change during an interview with Bloomberg last week. The move took place before Ms Ellison’s co-chief executive, Sam Trabucco, said that he was stepping down and would move into an advisory role.

Brian Lee, formerly a partner at Alameda Research Ventures, now works at FTX Ventures, the start-up investment arm of the cryptocurrency exchange.

While the implications for Alameda’s staffing were small, they are significant for the cryptocurrency start-up industry. Alameda was a prolific investor that backed more than 150 private companies, according to research from PitchBook.

Its portfolio includes the non-fungible token marketplace Magic Eden and cryptocurrency bank Anchorage Digital.

The transition began in January, when FTX Ventures raised $2bn, said Amy Wu, who runs the fund. No money changed hands between FTX and Alameda, she said. Venture investing is now completely concentrated under FTX Ventures.

The cryptocurrency exchange, the venture arm and Alameda are all independent of one another, Ms Wu said.

“All three are operating completely as separate entities.”

Mr Bankman-Fried, who has a net worth of $11bn and is the founder and chief executive of FTX, is listed as one of six “investors” in FTX Ventures, along with Ms Wu, Mr Lee, Adam Jin and Ramnik Arora, according to its website. Mr Arora leads product at FTX.

Alameda will focus mainly on exchange and over-the-counter trading and decentralised finance, Ms Ellison said.

The agreement to move its venture capital unit to FTX is not meant to signal a closer relationship between the two companies, she said.

“We’re arm’s length and don’t get any different treatment from other market makers,” she said. “The Alameda team isn’t working too much on the venture side day-to-day.”

The two companies, FTX and Alameda, have worked together on other deals.

Alameda offered cryptocurrency lender and trading platform Voyager Digital a $485 million loan in June, but the lifeline was not enough to stave off a liquidity crisis and bankruptcy.

Alameda and FTX made a joint cash offer to purchase all of Voyager’s digital assets and loans, but Voyager called the offer a “lowball bid” that disrupted the bankruptcy process.

Ms Ellison said Alameda is open to doing similar bailouts as the “crypto winter” rages.

“The more systemically important someone is, the more important it would be to try to support them,” she said.

Ray Dalio

Bridgewater Associates opened an office in Singapore, strengthening billionaire Ray Dalio’s presence in Asia.

The new office will be overseen by Chip Packard, head of client service for Eurasia, and Margaret Wang, who will manage the buildout and on-ground operations, the investment manager said in a statement.

This permanent presence will further strengthen our client relationships while also allowing us to explore new opportunities in a growing market
Chip Packard, head of client service for Eurasia at Bridgewater Associates

The team will also involve local hiring and staff from its US headquarters, including people from its research and client service departments.

“This permanent presence will further strengthen our client relationships while also allowing us to explore new opportunities in a growing market,” Mr Packard said.

Mr Dalio, who has a net worth of $22bn and is the founder of the world’s biggest hedge fund, has been growing his business in the Asian financial hub.

In 2020, he announced the opening of a family office in the city-state to run his investments and philanthropy throughout the region.

Mr Dalio has long held ties to Asia and Singapore, the hedge fund manager’s representative said in a statement at the time.

— AP and Bloomberg

Updated: September 05, 2022, 5:00 AM