by Alexandra Lebenthal
Son of Daedalus who dared to fly too near the sun on wings of feathers and wax. Daedalus had been imprisoned by King Minos of Crete within the walls of his own invention, the Labyrinth. But the great craftsman's genius would not suffer captivity. He made two pairs of wings by adhering feathers to a wooden frame with wax. Giving one pair to his son, he cautioned him that flying too near the sun would cause the wax to melt. But Icarus became ecstatic with the ability to fly and forgot his father's warning. The feathers came loose and Icarus plunged to his death in the sea.
“Bill Starges’ bet on TriMatter goes sour. Assets shrink to $1.2 billion”
“Bill Starges scrambles to find new financing as clock runs out.”
Pick your headline. The ending has the same outcome.
Bill started out as a trader at Goldman Sachs right after college. Getting into the sales and trading program was a coup for someone who went to a state school. Most of the trainees were from Ivy league schools. Bill hadn’t grown up well either. Wrong side of the tracks kind of life. Goldman was his ticket to the rest of his life.
Life at Goldman was lucrative, but Bill wanted more. He wanted it all on his own terms. He wanted the sky to be the limit.
Year after year, it seemed to only get better as assets increased. Bill became a media darling as well appearing on the financial channels and at hedge fund conferences. At the top, he had $14 billion in assets.
Bill and his wife Ellen had never scrimped when it came to their lifestyle and as their wealth grew so did their material possessions.
The five-story townhouse in Tribeca:
|The 15,000-square-foot oceanfront house in The Hamptons:|
|The Aspen Ski in Ski out house:|
|The Warhol, de Kooning and Damien Hirst:|
|The $10 million pledge to the Museum:|
|And clothes. Lots and lots of clothes. Enough to fill the rooms in each home that had been converted into closets:|
|They were featured in magazines and a sought out couple at events. And when it came to their own entertaining, to quote The Eagles, “They threw outrageous parties, they paid heavenly bills.”
But as time passed, it became harder to generate the same returns and Bill grew increasingly obsessed with outperforming the market. He had to find an edge that would distinguish him from his competitors or the same media that helped build him up would start tearing him down. So he took chances, risky ones, illegal ones, ones that could give him the greatest victories, or send him crashing down to the ground. The desire to win made him fly too close to the sun, the wax melted and it all came falling down.
|When it did, the material goods become a part of the past as well. Fire sales to raise cash for SEC fines, or pay off bank loans as they were likely collateral to begin with. Ellen virtually evaporated, her name disappearing from gala committees. Whereas they were regulars on the step and repeat at the City’s major galas, it was as if they never existed, although easily replaced by the new golden couples beginning their inexorable ascent.
Fill in Bill Starges’ name for any of the Icaruses who have flown too close to the Sun whose exploits have been chronicled in the papers. Whether insider trading, highly publicized short-sale campaigns, excessive leverage or bets gone wrong that caused declines in returns and assets to leave as quickly as they came in, once it’s too hot, the wax begins to melt and the fall is unavoidable.
I’ve also watched as some of those who were seemingly infallible and seemed to have reached god-like status, lauded in both business and society papers, are now only mentioned as their empires continue to crumble. Some have essentially disappeared from the landscape. America never understood Jay Gatsby, and it certainly doesn’t understand the outrageous fortunes of these successful investors and fund managers. Hubris is punished, downfalls are applauded, Icarus is forgotten. Success—and wealth—are a virtue, but only if accompanied by humility. Otherwise, you’ll end up on Page 6 when you fail.
|Alexandra Lebenthal learned from her father, Jim Lebenthal, and grandmother before, about the basics of finances and investments. Today she is the CEO of Lebenthal & Co., LLC and its wealth management division, Alexandra & James Co.|