Christopher Browne: Investment fund manager whose questions led to the fall of Conrad Black
Wednesday 17 March 2010
Christopher Browne was the Wall Street investment-fund manager who first raised the questions that would lead to the downfall and imprisonment of the publishing mogul Conrad (Lord) Black, the former owner of The Daily Telegraph. With 18 per cent of shares, Browne's firm, Tweedy, Browne Company was the largest single outside investors in Black's umbrella company, Hollinger International Inc, but in 2001 Chris Browne, their senior partner, became suspicious as to how Black and his wife, Barbara Amiel, were able to finance their lavish lifestyles.
It would be a further seven years before his suspicions were confirmed and Black was jailed for fraud for skimming off millions of dollars from Hollinger's investors, who included including Tweedy, Browne Co's clients, as well as Browne himself. The Canadian-born publishing magnate was said to have charged Hollinger $90,000 to refurbish a Rolls-Royce he drove around London, while his wife handed out lavish tips to doormen in New York's fanciest fashion stores then charged them to expenses courtesy of Hollinger.
Browne and his firm had a reputation as discreet and genteel on Wall Street, handling around $10bn of clients' money, before the Hollinger scandal started to surface. By 2003, however, Browne, who spent his 40-year career with the firm his father founded, was very much in the public eye. He led what would become a shareholders' rebellion which forced Hollinger's board to launch an investigation into Lord Black's finances, concluding that he had been running a "corporate kleptocracy" and that he and his wife saw Hollinger as a "cash cow to be milked of every possible drop of cash."
Amiel was said to have collected over $1m in salary and bonuses from 1999-2003 under her title of Hollinger's vice-president of editorial and publishing. But the investigation said she had done "little or no work" and that "had she not been the wife of Black, these amounts never would have been paid."
Federal prosecutors charged the media magnate with fraud and obstructing justice in 2005; he was convicted in 2007 and sentenced to six and a half years in prison. The US Supreme Court is currently studying his appeal against the fraud charges, an appeal based on a technicality – whether the so-called "honest services" law used in his prosecution is legal. Even if the Supreme Court ruled in his favour, he would have to serve his time on an obstruction of justice charge, imposed because he was caught on a security camera illegally removing boxes of documents from his office.
Browne, who died of a heart attack, was a highly respected fund manager, described by one of his peers as "one of the best-value investors in the world." He was also a teacher, and spoke regularly at the Columbia Business School in New York on topics such as "behavioural psychology in financial decision-making." His 2006 publication The Little Book of Value Investing advises would-be investors on how to sniff out bargains others are likely to miss. "Buy stocks like when you buy everything else," he wrote, "when they are on sale. Value stocks are about as exciting as watching grass grow. But have you ever noticed just how much your grass grows in a week?"
Christopher Browne was born in 1946, in the small, affluent New Jersey town of Summit. His father Howard Browne had co-founded what would become known as Tweedy, Browne, a small firm he once compared with a "thrift shop" but counting among its clients Benjamin Graham, often described as "the father of value investing," and Graham's protégé Warren Buffett.
After graduating in history from the University of Pennsylvania in 1969, Browne joined the family firm, becoming a junior partner in 1974. He would remain with Tweedy, Browne, mostly as managing director, until ill-health forced him to step back from active involvement last year and take on an advisory role. He had taken great interest in HIV/Aids research and his $5m donation to New York's Rockefeller University, of which he was a trustee, led to the 1997 opening of the Christopher H. Browne Center for Immunology and Immune Diseases.
Browne was also a trustee of the University of Pennsylvania, to which he donated $10m to establish the Browne Center for International Politics within the political science department. A keen landscape architect, he was on the Council of the National Trust for Historic Preservation and on the Board of the Institute of Classical Architecture, but his great passion was garden landscaping, particularly on the English model.
In 1996, for $13m, he bought 18 acres of land, formerly part of a golf course, in East Hampton on Long Island, New York, and spent 12 years landscaping it into an English-style country garden on an immense scale before he and his partner, an architect, decided which type of house would best suit the waterlily ponds, the wildflower meadow, the apple orchard and the thousands of diverse trees.
Browne's own private investments clearly paid off. Last year he put his one-bedroom Manhattan apartment on the market for $29.5m. It was no ordinary one-bedroom flat, but a 6,500 sq ft duplex in the desirable block at 515 Park Avenue, overlooking Central Park, with two bars and an "entertaining space" the size of a tennis court.
Christopher Howard Browne, investment-fund manager and philanthropist: born Summit, New Jersey 19 December 1946; partner to Andrew Gordon; died Palm Beach, Florida 13 December 2009.
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