The hedge fund pioneer made a legendary bet against Warren Buffett on activist traders

Jeffrey Tarrant, the co-founder of Protégé Partners, has passed away at 63 after a battle with brain cancer. According to a statement from Protégé Partners, Tarrant died at his Bridgehampton home on August 5.

Tarrant was a legendary seed investor, money manager, and mentor in the institutional markets. But he rose to international fame after betting on activist management strategies against Warren Buffett

Jeffrey Tarrant versus Warren Buffett

Jeffrey Tarrant famously bet the Oracle of Omaha in 2008 that hedge funds would outperform the S&P 500 over 10 years. The bet was for $1 million and would go to the charity of the winning participant’s choice.

The two invested the pot in Berkshire Hathaway B stock for the duration of the bet. During the decade-long wager, the pot appreciated to $2.27 million and Buffett won.

Buffett would then donate the money to Girls Inc., an education charity in Omaha, Nebraska.

Tarrant’s Professional Career

Tarrant was born in Stockton, California and attended University of California-Davis, where he studied economics. He went on to graduate with an MBA from Harvard Business School.

Following graduation, Tarrant joined Berkeley Asset Management and co-managed the Sequoia Fund, one of the first U.S. hedge funds. He would manage private wealth and go on to create AltVest, the first online directory for hedge fund and their managers.

Tarrant was also an early seed investor for managers like York Capital’s Jamie Dinan and Tudor Investment Corp.’s Paul Tudor Jones. He also was an early investor in Renaissance Technologies’ Medallion Fund.

Later, in 2002, Tarrant and Ted Seides founded Protégé Partners, a fund of hedge funds that specializes in smaller, established managers. The firm would famously invest in John Paulson’s Credit Opportunities Fund. Paulson & Co. would soon go on to earn $15 billion in 2007 betting against the U.S. subprime mortgage industry.

Tarrant was diagnosed with a brain tumor in 2017. At the time, he stepped back from active management and became chairman of the firm. He is survived by two sisters and two daughters.