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Subject: Leon Levy, Philanthropist

Dead at 77
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Date Posted: April 08, 2003 5:27:51 EDT

Leon Levy, a hedge fund pioneer who began investing at 13 with $200 and went on to make many millions, enough to make him one of the main individual backers of archaeological research, died on Sunday at his home in Manhattan. He was 77.

The cause was a heart attack, Shelby White, his wife, said.

Mr. Levy, who joined what was then the small brokerage firm of Oppenheimer & Company in 1951, when he was 25, and founded Odyssey Partners with Jack Nash in 1982, gave gifts ranging from $20 million to the Metropolitan Museum of Art, for a new wing, to more than $100 million to Bard College.

The support he and his wife gave to archaeology resulted most famously in the 1990 dig in Israel that found a golden calf of the kind described in the Bible as being worshiped as an idol.

Mr. Levy had a knack for leading trends in finance. Oppenheimer & Company was among the first to offer general investors the chance to invest in hedge funds, which are mainly used by sophisticated investors seeking to control their risks and maximize their returns.

He was a pioneer at recognizing how to make money on companies' depressed assets, first in the 1970's wave of leveraged buyouts, then by investing in bankrupt companies. His most famous deal was buying the shares of the parent company of the Chicago and Milwaukee Railroad for almost nothing in 1983 and eventually selling them for $150 each after the sale of valuable assets.

Odyssey Partners earned an average annual return for its investors of 22 percent over 14 years. Investing as an individual for the last two years, Mr. Levy warned people of the fragility of the stock market and moved away from it himself. He put some of his money into a complicated investment instrument involving Eurodollars and multiplied his investment by 16, said Eugene Linden, with whom he wrote his autobiography, "The Mind of Wall Street" (Public Affairs, 2002).

Mr. Levy firmly believed that investing is as much a psychological as an economic act and argued forcefully that the stock market surge in the 1990's did not reflect a new economic reality but only people's hopes. He warned in 1999 that the roaring market was likely to go down.

Much of his approach was simple common sense. For instance, in his book he said stock traders forget that whoever is on the other side of a transaction has an opposite theory of future price movements.

"There is a genius on one side of every trade and a dolt on the other, but which is which does not become clear until much later," he wrote.

Mr. Levy was born on Sept. 13, 1925, in Manhattan. His father, Jerome, a dry goods merchant, amateur economist and successful investor, predicted the stock market crash of 1929 and sold much of his stock before it happened. He taught his son many financial lessons, particularly the importance of corporate profits in charting overall economic directions.

The younger Mr. Levy graduated from Townsend Harris High School in Manhattan in 1939 and from the City College of New York in 1948. He majored in psychology. His grades prevented him from being admitted to an advanced course on security analysis.

From 1945 to 1947, he served in the Army in Germany.

In addition to his wife and a brother, Jay, who lives in Somers, N.Y., Mr. Levy is survived by his daughter, Tracy White of Manhattan.

In 1948 Mr. Levy took a job as a stock analyst with Hirsch & Company, a small firm. When Max Oppenheimer left to set up his own firm, Mr. Levy went with him as chief research analyst. The firm now manages more than $120 billion. By 1957, Mr. Levy and Jack Nash had become managing partners. In 1982, they sold Oppenheimer and formed Odyssey Partners, which was a $3 billion hedge fund before it was dissolved in 1997 in favor of smaller, less unwieldy operations.

Mr. Levy developed and perhaps embellished a reputation as a forgetful sort, once abandoning his wife at a party.

"How does a guy who can't find his pipe when smoke is coming out of his pocket manage to do so well?" he wrote. His modesty, which his friends said was absolutely genuine, was exemplified by his and Mr. Nash's decision not to put their names on their office door.

His wife said his forgetfulness seemed to have limits: he could remember the exact price he paid for a bond in 1953, for example.

And he was eager to learn new things. He wrote that his love of archaeology had a similarity to his fascination with new ways to invest. He called it "the delicious thrill of finding something that confounds the conventional wisdom."

Mr. Levy gave more than $140 million to nonprofit institutions, Business Week reported last year. Recipients included the Institute of Advanced Study at Princeton and Rockefeller University. One gift went to Harvard to pay for printing reports on archaeological digs, something for which it is hard to get money.

Usually, he preferred to give with no strings attached. But when Philippe de Montebello, the Met's director, offered to name the museum's new wing dedicated to Greek and Roman antiquities for him and his wife "in perpetuity," Mr. Levy wondered how long that was.

"For you, 50 years," Mr. de Montebello answered.

Mr. Levy asked for 75. He thought his daughter's feelings might be hurt if the name were changed during her lifetime. Mr. de Montebello agreed, and the museum got its wing.

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