Calling All Tigers



Published On

June 9, 2014

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CALLING ALL TIGERSTIGER 21: a peer-to-peer wealth James Dolan / illustration by David FoldvariYou’d expect there to be a guard, a big one, wearing sunglasses anda designer suit. A high-tech security system with a retinal scan. Ashadow-filled lobby with a series of electronic doors and multiplecameras that make it clear you are to keep well away from the peopleinside.Instead, the wrought iron gate to TIGER 21’s office – an UpperEast Side townhouse‚Äìis open. On this magnificent September day,the building’s foyer is flooded with sunshine. Rather than a burlysecurity chief, a friendly receptionist welcomes you. There isn’teven a secret handshake.Not what you’d ordinarily expect at a meeting place of some ofNew York’s wealthiest individuals. Then again, ordinary isn’t aword that’s used much with TIGER 21. (The fierce feline name is ashortened form of “The Investment Group for Enhanced Results inthe 21st Century”). Founded in 1999 as a discussion group of fiveformer entrepreneurs, the organization has grown to become NorthAmerica’s premier peer-to-peer network for the √ºber-rich.There are other investment clubs, other networks, other supportgroups. But there is nothing quite like TIGER 21, for TIGER 21is more than a bunch of robber barons sitting around talking stockwhile sipping dry martinis. Rather, it is a peer-driven forum wherepeople of great wealth discuss any number of financial topics‚Äìfrom investing to estate planning to dealing with one’s spendthrift kids‚Äìin a setting that is open and confidential, both supportive andchallenging at the same time. A NOVEL IDEA The idea for TIGER 21 sprang from MichaelSonnenfeldt’s head over a decade ago. At the time, Sonnenfeldthad just sold his real estate holding company ‚Äìhis secondentrepreneurial home run, having successfully sold his share of asizable real estate development in his early 30s.”I realized I had been really lucky to do it twice,” he muses.”Whereas the first time I was willing to take lots of risks, the secondtime I said, ‚ÄòI have to learn how not to do that. I can’t afford to makefoolish investments and lose money.'”So instead of trying to play stock broker. Sonnenfeldt inviteda handful of like-minded colleagues to join him for a monthlydiscussion of how to hang on to the wealth they had built.”That’s really the root of what we were trying to figure out,” hesays. “What were the best practices we could bring from otheractivities to help [us] learn from one another about how best topreserve wealth.”From the start, Sonnenfeldt intended TIGER 21 to be anexclusive network. Working groups are limited to a maximum of 14members. The commitment is substantial, with individuals partingwith one uninterrupted day a month and $30,000 (U.S.) annually.Individuals must also provide proof of more that $10 -million inliquid assets, but this is a minimum; in practice, the average networth of a TIGER 21 member is closer to $75 million. Together,the organization’s 140 members have more than $10-billion at theircommand.espite these impressive credentials, Sonnenfeldt points outthat net worth is not really a criterion for membership. “We’re notinterested in numbers” he says. “We’re interested in members whocan add something to a group.”As Sonnenfeldt explains, that “something” is the ability to con-tribute to the betterment of one’s peers. Within TIGER 21’s offices,members must be open, honest, and helpful‚Äìsecrecy and reticencehave no place. Outside, they must safeguard other members’ privacyas if it were their own. “The one thing that is absolute within thisorganization is integrity and confidentiality,” Sonnenfeldt says.To that end, the organization has established a number ofsecurity “gates” for prospective members, includinglengthy interviews with TIGER 21 executivesand members, calls to references, and backgroundchecks. Confidentiality is enforced with an ironcladprivacy agreement. So far, the system has workedwell. “In 10 years, we’ve never had any situation thathas in any material way threatened our members,”Sonnenfeldt says.EYE OF THE TIGER To the uninitiated, this emphasis on bothopenness and confidentiality seems something of a paradox. Sit inon a members’ meeting, however, and you understand: at TIGER21, probity and rectitude are the necessities of business. Simplyput, the organization would have no purpose if members feltanything less than completely free to speak their minds.Each day at TIGER 21 follows the same general format: First, a”state of the world” discussion led by a professional facilitator, in whichmembers air out issues, events, or investment opportunities that havecaptured their attention. This is followed by a formal presentation byan invited speaker. Past speakers have included Carl Icahn, Harry Mar-kowitz, Steve Forbes, and other financial celebrities.It is here where members demonstrate the ferocity implied in theirorganization’s name. A TIGER 21 presentation is less a polite dis-cussion than an intellectual street brawl: a candid, back-and-forth ex-change, with members interrupting frequently to challenge assump-tions, question data, and demand clear answers to pointed questions.After the presentation comes the portfolio defence, where amember bares his investment portfolio to the full view of othermembers. For the member presenting, the objective is to providerationale for each investment decision; for those listening, to askquestions and highlight areas of concern.It all sounds so civilized. But as Sonnenfeldt admits, thedefence rarely follows Robert’s Rules of Order. “We have a termhere called ‚Äòcarefrontational,'” he says. “Most [TIGER members]have entered a bubble in their life, where people around them arevery sycophantic. This is the one place where 11 people are saying,‚ÄòThat’s not very smart!’ They’re not saying it because they want youto feel stupid ‚Äì they’re saying it because they want to open you to ablind spot nobody else is willing to share with you.”TALKING TO TIGERS Civilized or not, it’s clear TIGER 21’s membersbelieve Sonnenfeldt is on to something. “It’s like going to the doctorand getting undressed,” says Ron Bruder. Like Sonnenfeldt, Brudermade his fortune in real estate; he now spends the bulk of his time onhis philanthropic work. “You’re showing everything, and you’re show-ing everything accurately, because you want accurate advice. You comeaway from that with a better understanding as to what [you’re] doingright, what [you’re] doing wrong, and what [your] options are.”Robert Frey agrees. “I view that candour as a sign of respect andtrust,” he says. One of the algorithmic traders behind the successof hedge-fund giant Renaissance Technologies, Frey believes theability to have an open, clear-headed dialogue where nothing is offlimits is the key to TIGER 21’s appeal. “You come here, whateveryou think, however smart you think you are, how much of a big shot ‚Äìyou very quickly learn that there’s real value in those otherpeople being around the table.”But $30,000 a year’s worth of value? Sure, such fees are chumpchange to the average member ‚Äìabout 0.04 per cent of a net worthof $75-million. Still, are the rich really willing to shell out that kindof money for a monthly chat?”It’s hard to put a price on meeting people who can change yourlife,” says Ziel Feldman, another of TIGER 21’s successful real estateentrepreneurs. “What I’ve garnered are experience and knowledgethat have helped me in what I do. Knowing globally, nationally,how people are thinking – that has been invaluable to me.”Tommy Gallagher, the former vice-chairman of CIBC World Mar-kets, is more outspoken. When asked about the value of TIGER 21membership, Gallagher doesn’t pull any punches. “I don’t buy thepremise of the question,” he replies. “I don’t think people [join]TIGER 21 because they think they’re going to make $60,000 byputting $30,000 in.” Instead, the true value of TIGER 21 lies in thenetwork of successful, well-connected people ‚Äì and all the insightand resources that network represents.ROARING INTO CANADA Beginning March 2011, Canadians willhave an opportunity to put that network to work for themselves.That’s the date of TIGER 21’s international debut, with one groupeach in Vancouver, Calgary, Toronto, and Montreal.Leading TIGER 21’s charge into the Great White North will beThane Stenner, as managing director. A veteran wealth manager withStenner Investment Partners within Richardson GMP and a successfulentrepreneur in his own right, Stenner has been working both for andwith some of Canada’s wealthiest people for over 25 years now. AlongsideStenner, will be Richard Deacon, as director of strategic partnerships.Like Sonnenfeldt, Stenner intends to keep the Canadian version ofTIGER 21 exclusive. Over the next few years, it will be his job to inviteperhaps 120 of the estimated 30,000 Canadians with more than $10-mil-lion in their bank accounts to join TIGER 21. “We’re looking for titans,”Stenner says. “People who bring extraordinary life and business experience tothe table, along with the ability to share that experience with others.”The Canadian version of TIGER 21 will adapt the same generalstructure as its American counterpart. However, Stenner intends totweak the format (meeting 10 times per year instead of 11), and adda fair bit of Canadian content to reflect the different economies, taxlaws, and investment climates on either side of the border. “It’s notgoing to be a U.S.-centric program,” he says. “We’re not looking tosimply transplant American speakers. [Our program] needs to be asapplicable as possible to the Canadian high-net-worth experience.”A key to that experience will be diversity. “One of the things we’recognizant of is the difference in the cultural and business backgroundsof wealthy Canadians,” Stenner says. To that end, he’ll be looking to en-sure varied points of view in each member group. “In Calgary, we’re notlooking for 14 oil and gas guys; in Vancouver, it won’t be all real estateguys; Montreal will be a mix of English and French speakers; and so on.”As much as he is looking to the business of TIGER 21, Stenneradmits there is a personal motive to joining the group. “It’s energiz-ing to be around other successful people,” he says. “It will keep mesharp. I will be challenged by the discussion and debate.” A broadgrin spreads across his face. “It will be fun.” Another example of theopenness that seems to define TIGER 21.