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Value Investing Icon Jumps Off Manhattan Skyrscraper To His Death Days After Liquidating Fund

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by Tyler Durden
Wednesday, Apr 28, 2021 - 11:55 AM

Desperate analysts languishing on the bottom rung of finance's long career ladder aren't the only ones committing suicide anymore.

Charles de Vaulx, a renowned value investor and co-founder of International Value Advisors, "died suddenly Monday afternoon, leaving the asset management industry in shock. It was an apparent suicide, according to the New York Police Department, who confirmed to the press that de Vaulx jumped from the 10th floor of a Manhattan skyscraper to his death. The apparent suicide comes just days after he finished winding down his investment firm.

As Barrons adds, "de Vaulx, 59, had built a long career as a risk-aware global investor who never deviated from his deep-value approach, even when it meant keeping as much as 40% of his funds in cash because he couldn’t find attractive investments during a 13-year stretch in which the markets favored faster-growing companies. De Vaulx’s conviction set him apart in the industry, even among other battle-tested contrarians." He was also a father of two.

Charles de Vaulx

For de Vaulx and thousands of other dedicated value investors, the last decade or so, where the Federal Reserve has perverted the price discovery process by flooding the financial system with liquidity, has been led to an extended drought for their businesses. Though value enjoyed a brief resurgence earlier this year, momentum growth funds and cryptocurrencies have produced world-beating returns while dividend-producing value stocks have seen valuations stagnate at levels well below their momentum rivals as investors place a premium on projections in a low-yield universe.

And while even value-investing titan Warren Buffet has been forced to adapt by embracing Apple and other tech stocks, de Vaulx - a disciple of legendary French value manager Jean-Marie Eveillard at SocGen and then First Eagle, before he went on to launch IVA in 2008 - was a value purist until the literal end. He served as chairman and CIO of IVA until it closed up shop earlier this month.

"Others were willing to compromise and try some new approaches to adapt," said Gregg Wolper, senior analyst at Morningstar Manager Research. "De Vaulx didn’t think that was appropriate, and stuck to the deep value approach. His investors appreciated it because there weren’t many other places to find that."

And the end finally came earlier this year when International Value Advisers announced in March that it planned to liquidate its two US mutual funds. The liquidation was finalized last week. The firm added that "all associated accounts and funds will be similarly liquidated," Morning Star, which broke the news of Vaulx's suicide, reported.

"It is with heavy hearts that we announce the passing of our Chairman and CIO, Charles de Vaulx," reads a statement on IVA's website. The firm had more than $20 billion in assets under management at its peak, but had shrunk to just $863 million as of the end of last year.

But for all the years of peer-beating performance at First Eagle and then IVA, de Vaulx's investors apparently weren't thrilled when he took a step back as the shocking accumulation of debt in the post-crisis era deeply bothered him, making it near-impossible for him to pick stocks using his traditional methods.

Very much a bottoms-up investor who did deep research into companies and would passionately make the case for them, de Valux was also attuned to broader macroeconomic forces. And the high levels of debt around the world—both government and individual—troubled de Vaulx. That along with high valuations contributed to his desire to hang on to cash, even as markets charged ahead. “The reason he stuck with it wasn’t because he was stubborn but because he felt it was the best way to invest to protect his shareholders from losses and it was his duty to preserve capital,” Wolper added.

That conviction earned him respect in the industry. "Charles was a thoughtful, talented, disciplined, and risk-averse investor, who brought an intensity to his craft,” said Larry Pitkowsky, a fellow value manager at GoodHaven Capital Management. “And he was also a generous friend to many in the investment business."

One source close to de Vaulx told the New York Post that his death was like "a Shakespearean tragedy." The Post also reported that de Vaulx had reportedly been depressed by the redemptions at his firm, especially when longtime clients pulled money.

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