Tepper talks business, philanthropy
David A. Tepper returned to Carnegie Mellon last Thursday to edify an audience on his vision for the new Tepper Quadrangle, answer questions about his business strategy and, at one point, sing a few bars from Elvis’s “Heartbreak Hotel”.
Tepper first made his mark on Carnegie Mellon in 2003, when he donated $55 million, after which the Graduate School of Industrial Administration was renamed the Tepper School of Business. Last November, on the same day as President Subra Suresh’s inauguration, the university announced another donation from Tepper, this time of $67 million.
Tepper’s most recent donation will be used to expand Carnegie Mellon’s campus by building the four-and-a-half acre Tepper Quadrangle. The Tepper Quadrangle, Tepper said, will include a new space for the Tepper School of Business and the Center for Innovation and Entrepreneurship, formed by a marriage of the Tepper School of Business’s Donald H. Jones Center for Entrepreneurship and the School of Computer Science’s Project Olympus.
“The idea is to create some cross-disciplinary, synergistic places in the Tepper Quadrangle,” Dean of the Tepper School of Business Robert M. Dammon said when he introduced Tepper in front of a full McConomy Auditorium.
Tepper, born and raised in Pittsburgh’s East End, stayed close to home for his education, earning his undergraduate degree in economics from the University of Pittsburgh in 1978 and his MBA from Carnegie Mellon in 1982.
After he graduated from Carnegie Mellon, Tepper worked for the treasury department of the Ohio-based Republic Steel. Tepper subsequently worked for Equibank and then Goldman Sachs, where, after being turned down for partner three times, he left to start his own business, Appaloosa Management.
During the talk, both undergraduate and graduate students in the Tepper School of Business lined up on either side of the auditorium to ask Tepper about his life, business sense, and the Tepper Quadrangle.
A graduate student opened the queue of questions by asking Tepper about the motivation behind his $67 million gift and his vision for the Tepper Quadrangle. “The first gift was basically paying back the school; I had a great education here,” Tepper said. “The second gift, I thought the school needed to be elevated a little bit. We need to move up in the rankings a little bit.” Tepper also mentioned that he wanted to see the Tepper School of Business be more integrated into the rest of the Carnegie Mellon community.
Another important part of the Tepper Quadrangle, Tepper said, will be new athletic facilities. After seeing the university’s existing athletic facilities earlier that day, Tepper noted that they “still suck.”
Another student asked Tepper what he considered the most valuable part of his education at Carnegie Mellon. “The education gave me a great foundation, a great business knowledge,” Tepper said. “You come out of here, and you’re as prepared as anybody.”
Audience members also wanted to know what Tepper learned outside of school during his time at companies like Equibank and Goldman Sachs where, Tepper said, he became head trader in only a year. Tepper said the most important thing for students to learn is that they don’t know anything. “You’re no smarter than the market — when you become a good trader is when you realize how stupid you are.”
When someone asked him what he would have done if he hadn’t become a hedge fund manager, Tepper joked that he could do a pretty good Elvis impersonation, treating the audience to a verse of “Heartbreak Hotel”.
Tepper also spoke about some of his recent philanthropy efforts, including his work with Better Education for Kids, a political action group that Tepper co-founded to improve education in New Jersey.
One student asked Tepper if he ever considered signing the Giving Pledge, described on its website as “a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy.” The Giving Pledge has been signed by millionaires and billionaires ranging from Warren Buffett and Elon Musk to Bill and Melinda Gates.
Tepper remarked that he had been investing in philanthropy long before similarly well-known billionaires, and wasn’t planning on stopping. “I don’t need a pledge to give,” he said.