Back in 1981, if you’d said, “I’m going to create a firm with a bunch of people from the University of Chicago,” people would have laughed.
It was an exceptional group of people. I had the privilege of serving as Gene’s research assistant, and he’s been involved with the firm since the beginning as a director. Gene introduced me to Mac McQuown when I finished my MBA from the University of Chicago, and I went to work for Mac. Through Gene’s class, I also met Rex Sinquefield, who would become my business partner. Gene, Mac, Rex, and I were kind of the core group. And, somehow, we managed to pull it off.
When we started, we wanted to create a mutual fund, and people said, “You know, you have to have an independent board of directors.” So Rex and I went over to the University of Chicago business school. We walked into Merton Miller’s office and asked him to be an independent director, and he said, “Sure.” We caught Myron Scholes on his way to lunch, and he said, “Sure.”
We quickly added Jack Gould (who was dean of the business school), George Constantinides (who taught at the business school), and Roger Ibbotson (who had been a classmate of mine). We built the firm around leading academics. And they all joined us without knowing if they’d ever get paid.
We started on a shoestring. The world headquarters was my apartment. The first trading room was my spare bedroom. We didn’t have any money to pay directors fees.
People often ask, “How did you get those first clients? You didn’t have a track record.” A big part of the reason was that we had these leading academics willing to lend their names to help us establish credibility. That’s worth a lot. And that became the motivation for giving back to the University of Chicago.
It’s been a fantastic experience. I am so proud to have been part of it. Thank you for this honor. I’m humbled by it. I know you could find people who deserve it more than I do, but I assure you that no one would appreciate it more.
Read more: University of Chicago Honors Dimensional Founder David Booth