Paul Kazarian
Paul B. Kazarian | |
|---|---|
| Born | October 15, 1955 Pawtucket, Rhode Island, U.S. |
| Occupation(s) | Investor, philanthropist, ex-investment banker |
| Years active | 1981–present |
| Known for | Founder and CEO of Japonica Partners; major investor in Greek government bonds during the 2013 debt crisis; former CEO of Sunbeam-Oster |
Paul B. Kazarian ( ; born October 15, 1955) is an Armenian-American investor, philanthropist, and ex-investment banker. He founded and currently serves as managing director and CEO of Japonica Partners, a private equity hedge fund. Before launching this firm, Kazarian was employed at Goldman Sachs and acted as president and CEO of Sunbeam-Oster between 1990 and 1993, engaging in corporate raiding activities.
Kazarian gained recognition for his assertive bidding tactics against wealthy individuals and institutional investors, notably competing with Kohlberg Kravis Roberts (KKR) over Borden. His investment strategy is notably discreet, involving opening and closing positions without public disclosures or detailed explanations. This approach has led the financial sector to often categorize him as a "vulture capitalist". Due to the significant size of his investments (approximately $250 million), The Hedge Fund Journal referred to his fund as a "money manager for money managers."
Amid the 2013 Greek debt crisis, Kazarian emerged as a major purchaser of Greek government bonds, eventually overseeing a portfolio valued at €2.9 billion (US$3.8 billion), which represents the bulk of his personal wealth. In December 2017, he established an office in Lisbon, Portugal dedicated to acquiring assets within the real estate and technology sectors.
Early life and education
Born on October 15, 1955, Paul B. Kazarian is the son of Armenian immigrant parents. His grandparents, Charles and Agnes Kazarian, were survivors of the Armenian genocide. Raised in an Armenian neighborhood in Pawtucket, Rhode Island—a modest mill town—he named his investment firm Japonica Partners after the street where he grew up, inspired by the Japanese flower.
Kazarian obtained a Bachelor of Arts degree from Bates College in Lewiston, Maine, followed by a master's degree from Brown University. He earned an M.B.A. from Columbia Business School, where he completed an internship at Goldman Sachs that led to a full-time position in their investment banking division.
Goldman Sachs & Co.
Kazarian began his career at Goldman Sachs in 1981 as an investment banker focusing on multinational corporations and emerging markets. After several demanding years, he departed from the firm in 1987.
Japonica Partners
Established in 1988 in Providence, Rhode Island, Japonica Partners is under Kazarian's leadership as president and CEO. In 1993, he founded the Charles & Agnes Kazarian Eternal Foundation and has chaired it since its inception. Japonica has overseen roughly $2 billion in shareholder assets under his guidance, concentrating on undervalued investments and underperforming global asset classes.
Sunbeam takeover
At age 37 in 1990, Kazarian was appointed chairman and CEO of Sunbeam-Oster following his private equity firm's acquisition of the company through a corporate raid. He successfully turned Sunbeam around from near insolvency by generating multiple revenue streams and restoring profitability. His tenure has been analyzed as a Harvard Business School case study; Harvard professor Steven Fenster described him as "a mad genius" with remarkable business insight. Nonetheless, employees portrayed him as an "overbearing boss" with an authoritarian management style characterized by late-night crisis meetings and fostering competition among departments that often humiliated senior managers. Former SEC chairman Roderick Hills observed that Kazarian’s reputation is nuanced: "no one is quite as good or quite as bad as they're supposed to be."
In 1991, Kazarian's earnings totaled $1.84 million, with top managers occasionally receiving bonuses up to 20% of their annual salaries. By 1994, his compensation had increased to $2.75 million. His leadership methods eventually became deemed "unacceptable," particularly after he attempted to relocate Sunbeam's headquarters to Nashville for tax advantages without board consent. When requested by the board to resign, he refused and sought to assert executive control forcibly, resulting in suspension and contract termination. After his departure, Sunbeam’s stock initially fell by 10% but rebounded within four months while trading volume remained elevated permanently. Subsequently, Kazarian faced several lawsuits initiated by former colleagues but prevailed in all cases, securing settlements amounting to $160 million.
Greek debt crisis investment
Recognizing the economic downturn in southern Europe, Kazarian turned his attention toward opportunities in the region. During a visit to Greece, he discovered the absence of detailed government financial reports and began scrutinizing the nation’s expenditure and debt metrics. Identifying a gap between official data and underlying economic conditions, he initiated purchases of Greek government bonds in June 2013, shortly after the 2012 parliamentary elections. Kazarian did not reveal his motives or the extent of his acquisitions to Greek authorities. His initial investment, amounting to around one billion dollars, was made at 11 cents per bond and subsequently appreciated to 45 cents, with bond values rising to 57 cents, generating substantial returns. Although he traded approximately $3.8 billion in bonds, Kazarian has indicated that his overall bond holdings near $4 billion.
During the 2013 crisis surrounding Greek government debt, Kazarian became one of the principal investors in Greek bonds, assembling a portfolio valued at €2.9 billion (roughly $3.8 billion). Market analysts largely regarded his strategy as high-risk and unpredictable. The Greek government agreed to acquire a portion of his holdings at prevailing market prices. Throughout this period, he maintained dialogue with influential parties such as Greek finance ministers, policymakers based in Berlin, officials from the European Central Bank, and economists from the IMF.
Investment philosophy
Kazarian is often labeled a vulture capitalist, focusing on purchasing financially distressed companies at discounted prices, revitalizing their operations, and eventually selling them for profit. His fund’s significant investments—typically starting at $250 million—have earned it recognition from The Hedge Fund Journal as a "money manager for money managers." In his dealings with Greek bonds, he pointed out how EU accounting rules obscure eurozone financial realities by treating future valuations as present values within a legal framework designed more for regulatory compliance than genuine fiscal transparency. This understanding formed the foundation of his investment approach. To protect his long-term interests, Kazarian keeps details about specific positions and strategies confidential.
Personal life
He lives in Providence, Rhode Island and is distinguished by his signature "round, horn-rimmed glasses." On October 6, 2016, Kazarian received a special editors' award from The Accountant, the International Accounting Bulletin, and Timetric for his efforts in enhancing democracy through improved government financial management.
Kazarian has also served as a guest lecturer on topics related to business and philanthropy at prestigious institutions such as Harvard Business School, London Business School, Columbia Business School, Dartmouth's Tuck Business School, the U.S. Military Academy at West Point, and Peking University's National School of Development.
Political and economic views
While Kazarian has not publicly aligned with any political party, he has expressed opinions on various matters.
Perspectives on Greek fiscal stability
In the aftermath of the 2013 Greek government-debt crisis, Kazarian stressed the importance of comprehensive financial and economic reforms in Greece. He proposed appointing a "five-star finance minister" with international credentials to restore confidence and credibility. Additionally, he suggested Greece implement Public Sector Accounting Standards (IPSAS) once its debt level reaches 18% of GDP.
Perspectives on Greek debt
Kazarian is a vocal proponent of Greece’s fiscal framework, asserting that the nation’s debt levels are considerably less than official statistics indicate. He emphasizes that government bonds remain lucrative investments, contrary to the depiction in Bloomberg’s World Bond Index. He also notes that under the Maastricht Treaty, any revision of Greece’s debt calculation requires unanimous consent from the European Council, a process that can artificially elevate net debt figures. In an interview with Bloomberg Markets, he criticized the nearly $19 billion in Greek debt forgiveness for failing to influence credit ratings. Kazarian advocates assessing Greek debt based on its repayment schedule rather than nominal face value—312 billion euros in 2015—highlighting significant write-downs due to low interest rates and postponed repayment commencement.
Mario Draghi
Kazarian has observed that Mario Draghi, during his tenure as president of the European Central Bank, was subjected to undue pressure from ineffective political leaders, which impaired the eurozone’s operational effectiveness. He claims that mismanaged European governments have politicized the ECB’s mandate. His opposition to Draghi’s decision to reduce interest rates generated debate within financial communities.
Wealth and philanthropy
Amid the 2013 Greek government-debt crisis, Kazarian made a public offer to sell the Greek government a bond portfolio valued at 2.9 billion euros (about US$3.8 billion), which was accepted at full market value. Numerous financial experts believe Kazarian continues to hold substantial Greek debt assets. As of December 2016, his net worth was estimated between $4 billion and $4.1 billion.
In 1993, Kazarian established two charitable organizations dedicated to advancing economic growth, education, and technology. The Charles & Agnes Kazarian Eternal Foundation (CAKE), named in honor of his grandparents, focuses on empowering families through initiatives in economic development, education, and healthcare. The Kazarian Foundation shares similar objectives and collaborated with the American India Foundation through a Knowledge Partnership program.
Kazarian led the organizing committee for a 2010 Singapore Heritage Celebration and delivered the keynote address for a Knowledge Partnership between Singapore’s Ministry of Foreign Affairs and the Singapore Cooperation Programme in 2011. He has also been active with the Asia Society, co-chairing its 2011 Awards Dinner, and served as chair for the American India Foundation’s fifth annual Spring Awards Gala held in New York City in 2008.
See also
- List of Bates College people
- List of Brown University people
- List of Columbia University people
- List of venture capitalists
External links
- Paul B. Kazarian at Japonica Partners
- Paul B. Kazarian at J-InterSect
- Paul B. Kazarian at Kazarian Family Foundation
- Paul B. Kazarian in New Philanthropy Benchmarking
- Paul B. Kazarian in the Vulture Investors Book