Appaloosa LP

David Tepper

David Tepper runs Appaloosa Management, the hedge fund he founded in 1993 after eight years at Goldman Sachs. He joined the bank in 1985 as a credit analyst and was running its high-yield debt trading desk within six months. Before Wall Street he earned a bachelor's degree in economics from the University of Pittsburgh in 1978 and an MBA from Carnegie Mellon in 1982. Appaloosa was built around a single conviction: when markets panic, they misprice things. Tepper is a distressed debt specialist who buys beaten-down securities in stressed companies and holds them while they recover, leaning on rigorous fundamental analysis and a willingness to be early and contrarian. His firm is known for concentrating on a small number of big, well-researched bets rather than spreading money thinly. The trade that made his name came during the 2008-2009 financial crisis. As banks collapsed, Appaloosa bought deeply depressed financial stocks including Bank of America and Citigroup when most investors were fleeing them. The wager proved out, generating roughly $7 billion in profit as the positions recovered and making Tepper the highest-earning hedge fund manager of 2009.

Top Position

BABA 15.6%