Master Investor: Ronald O. Perelman, W’64, WG’66

Ronald Perelman’s business philosophy is that successful companies generally do one thing extremely well, and they should concentrate on doing just that. Perelman proved his point over and over again, becoming one of the late 20th century’s most accomplished investors.

Perelman was one of the most successful users of the high-yield debt (junk) bond market. His 1985 takeover bid for cosmetics giant Revlon was financed through Michael Milken, WG’70 (see p. 42) and became one of the best-known battles in American corporate history. He retains the role of Revlon chairman to this day. His storied career began when he bought a stake in a jewelry concern, Cohen-Hatfield, and parlayed that into the controlling interest in MacAndrews & Forbes, whose main product was licorice extract. Using MacAndrews & Forbes as a holding company, he acquired other businesses with strong brand recognition.

Perelman would help realize the value of the company and sometimes sell non-core assets. Within only a dozen years, he used his first million-dollar investment to build a portfolio of several billion dollars. His control spread to film processing (Technicolor), banking (Golden State Bank Corp.), movie cameras (Panavision), and tobacco (Continental Cigars — a personal favorite for Perelman, who had a custom cigar created for his use. Eventually he quit smoking and sold the company).

Perelman has made his name through deals that are bold, but in the end successful. Over time, Perelman’s strategies of making overly complicated companies slimmer turned many of them around and gave them new life. Perelman is a Wharton Overseer and Penn Trustee. The Perelman Quadrangle, the historic heart of campus, is named in honor of his generous gift.

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