C. FREDERICK ‘FRED’ TAYLOR
TGS MANAGEMENT LLC
THE MONEY: Taylor is the “T” in TGS, an extremely secretive quant hedge fund with offices in Irvine.
THE NUMBERS: Estimates of Taylor’s wealth vary from $1.2 billion to multiple billions. Along with founding members David Gelbaum and Andrew Shechtel, the trio first gained national attention about nine years ago when a Bloomberg report said the hedge fund managers had “secretly directed one of the largest pools of philanthropic capital for years,” one it estimated at more than $13 billion.
RARE SIGHTINGS: There’s been next to no mention of the firm or its founders since the Bloomberg report, with the exception of the Business Journal reports on Taylor’s real estate investments in Irvine. Sources familiar with the founders tell the Business Journal that prior estimates of Taylor’s wealth are likely well on the low side, giving us confidence to boost his estimate by half a billion dollars this year.
THE MENTOR: The partners are disciples of South Orange County resident and “Man for All Markets” by Edward O. Thorp, founder of one of the world’s first quantitative hedge funds, Princeton-Newport Partners, in 1969. Thorp told Businessweek that the men opened a hedge fund in 1989, and practiced a form of statistical arbitrage, seeking to profit from the tendency of recently fallen stocks to rise, and the recently risen to fall.
PHILANTHROPY: According to Inside Philanthropy, perhaps as much as $850 million of Taylor’s giving gets funneled through the Vanguard Charitable Endowment Program. He’s been reported to be a major supporter of the Landmine Survivors Network and other human rights causes. Taylor is a major benefactor and board member of Tarbut V’Torah Community Day School in Irvine, a Jewish day school founded by late businessman and Holocaust survivor Irving “Papa” Gelman, on land donated by the Samueli Foundation.
The $240M Real Estate Mystery
The operations of TGS Management LLC are often shrouded in mystery, but the company’s local physical footprint is anything but following its largest Orange County investment to date.
The Irvine-based quantitative finance hedge fund has rapidly ramped up its OC real estate presence over the past three years via a series of acquisitions, development plans and leases.
Near the start of 2023, it supersized its local holdings, with an affiliate it controls spending $240 million for 42 acres of vacant land in Irvine, records indicate.
It’s the largest real estate deal in the city since 2020.
The deal with TGS represents more than one-fifth of the total land available for commercial development in the Great Park Neighborhoods, the FivePoint-controlled land that largely surrounds the city-run Great Park.
TGS, under a venture called Barranca Properties LLC, paid about $5.7 million per acre for the parcel.
Reliable sources tell the Business Journal that TGS could develop the site into a large data processing hub for its local finance operations, though others are skeptical of those plans. TGS recently built another data center in the Spectrum area of the city, alongside the 405 freeway.
It paid $28 million for that 4.6-acre site. The new 48,260-square-foot data facility is expected to be used for its quantitative trading activities. The building is across the freeway from the Spectrum Terrace office complex, where it leases a full building.
TGS in 2021 also paid nearly $50 million for the former South Orange County campus of California State University, Fullerton, a two-building complex in the Spectrum area that the school has since closed.
The pair of two-story offices at 1 and 3 Banting total about 138,000 square feet; the property traded hands for around $360 per square foot.
As in the case of the deal with FivePoint, it is still unclear what TGS has planned for the former CSUF site, which runs some 12 acres. There’s no indication it’s available for lease, or occupied.
Similarly, the Spectrum Terrace lease also raises question: it’s much larger than TGS’ current headquarters, and wouldn’t appear to be needed by the company given the relatively small size of its workforce, as the company is reported to be extremely methodical and picky about who it hires. “A few engineers here are downright geniuses,” said one online posting on Glassdoor.
Views from the outside of the Spectrum Terrace office show the building has its owns gym, rock climbing wall and plenty of other amenities.