Tuesday, March 27, 2007

How To Invest Like Brooke Astor

The New York Times (NYT) has had an interesting series of articles over the past year or so discussing the tug of war over control of the personal finances and estate of socialite and philanthropist Brooke Astor’s fortune. The story gets interesting as her son, Anthony D. Marshall (son with her first husband but he took the last name of her second husband) is at odds with his son Philip and the trust division of JP Morgan Chase (JPM). If you are into soap operas then stop reading now. However, if you are interested in asset management then please read on.

Today’s installment in the NYT times of the Astor/Marshall story disclosed the findings of an audit over Astor’s investments. The entire estate was valued at $131 million. Real estate accounted for $41.2 of the estate. Personal property was valued at $10.3 million including some baubles that Mrs. Astor owns. Private equity and hedge funds accounted for over 1/3 of her assets or $46.8 million. It was disclosed in the NYT that a $20.6 million investment was in the Optima Fund, L.P. hedge fund which I am not familiar with and hence have no opinion. Bonds and cash equivalents were just over $9 million. Finally stock holdings were $23.5 million.

The stock portfolio is a compendium of big cap investing including, according to the NYT: Morgan Stanley (MS), Johnson & Johnson (JNJ), Citigroup (C), Eli Lilly (LLY), Four Seasons Hotels (FS), Google (GOOG), Molson Coors (TAP), PepsiCo (PEP), Proctor & Gamble (PG), Staples (SPLS), XTO Energy (XTO) , Encana (ECA), Cimarex (XEC), Cicso Systems (CSCO) and United Technologies (UTX). MS was her largest individual holding valued at $3.4 million.

What is strange is that her grandson accused her son of mismanaging the portfolio. I guess you have to call it as you see it and the son deserves some accolades because this is one splendid portfolio with lots of big safe growth and income names. As for the other charges leveled by her grandson at her son of stealing from and mistreating Mrs. Astor, that we can leave to the courts.

At the time of this Blog entry Scott Rothbort, his family and or clients of LakeView Asset Management, LLC were long shares of C and GOOG although positions can change at any time.


Rabbi Bruce said...

I don't remember the figures, but the article quotes the son saying he increased her assets from something like $80mm to $135mm in 25 years!

Granted she has spent and donated a lot of money but doubling money of that side in 25 years is not great management. The increase in NY real estate alone probably accounted for $25-30mm of the total increase.

To really figure it out, we would need to find what has been spent/donated and then figure out a real return.



Thank you and a zeisen Pesach.

The point of my article was showing where the assets of someone like Mrs. Astor are invested in. A true accounting would likely reveal donations and expenditures along the way as she is a well know giver.