Ira Rennert
| Ira L. Rennert | |
|---|---|
| Born |
May 31, 1934 Brooklyn, New York |
| Residence | Sagaponack, New York |
| Alma mater | B.A. Brooklyn College M.B.A. New York University |
| Occupation | Investor |
| Net worth |
 US $ 6.5 billion(Feb 2015) |
| Spouse(s) | Ingeborg Hanna |
| Children | 3 |
Ira Leon Rennert (born May 31, 1934) is an American investor and businessman. Today he controls one of the nation’s largest privately held industrial empires, and his personal fortune is estimated to be $6.5 billion.
Rennert is a graduate of Brooklyn College in 1954, and earned his master's degree from New York University's Stern School of Business in 1956, where he later was on the Board of Overseers.
Rennert started his career as a credit analyst on Wall Street in 1956. He also served as a partner at Rubin, Rennert & Co., before launching his own business, I. L. Rennert & Co. in 1962. This occurred again in 1963 and as a result, his license was revoked on November 29, 1964, effectively banning him from the securities industry. According to a company spokesman, Jon Goldberg: "Due to market conditions, the firm found itself in violation of the net capital rule and Rennert raised capital and put it into the firm to bring it into compliance. However, the firm once more fell beneath the net-capital requirements and he shut the company down."
Michael Milken —as a bond trader for Drexel Burnham Lambert—was successful selling high-risk, high-yield bonds issued by struggling or undercapitalized companies. Integrated Resources raised $2 billion in junk bonds financed by Milken but ultimately collapsed amid scandal and defaulted on $1 billion of bond debt in May 1989 (cf. the 1991 book Den of Thieves about the junk bond scandal). As an outside board member, Rennert was not dragged down by the collapse and began to raise junk bonds on his own behalf to finance acquisitions for the Renco Group.
Rennert's strategy for building Renco was to acquire all the shares of struggling companies and to finance the acquisition by issuing junk bonds. Along the way, Rennert paid substantial dividends out of the business to himself. In a series of junk bond issues since 1995, Renco’s subsidiaries have borrowed an estimated $1.1 billion and transferred $322 million (29 percent) to Renco Group, according to documents filed with the U.S. Securities and Exchange Commission (SEC). Backed by blue-chip mutual funds and hedge funds such as John Hancock Funds LLC and Putnam Investment Management LLC, Rennert now didn’t have to invest much of his own money. His purchase of AM General in 1992 was bought with a down payment of just $10 million. In 1994, Fluor Corp. of Los Angeles sold the Doe Run Company to Renco, with the latter paying $52 million in cash, and approximately $60 million in debt payable over an eight-year period. In 1997, Doe Run went on to pay $247 million for a similarly environmentally troubled lead smelting complex from the Peruvian government, as well as borrowing more money to service its Fluor Corporation debt. And in 1998, Doe Run sold $305 million in junk bonds for financing its Peruvian acquisition as well as more lead mines in Missouri (according to Doe Run filings with the SEC). Since 1998 most Renco financings have been bank debt.
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