For most parts of his life, Robert F. Smith has largely avoided the spotlight as he quietly but determinedly worked his way up to becoming one of the richest African Americans in the world with a net worth estimated at around $6 Billion. Now that he has attained his coveted status, there has been no escaping public attention. The ace investor, businessman, and chemical engineer has amazed many and won several accolades for his remarkable achievement of building one of the best performing private equity firms in the world – Vista Equity Partners. He has also endeared himself to many with his philanthropic gestures.
On the negative side, Smith has caught flak for taking part in a tax evasion scheme that saw him default on paying taxes on $200 million worth of assets. That whole tax brouhaha has made him even more famous than before and the ace investor is now working to launder his image with several thoughtful gestures. Whether he will succeed or not is anybody’s guess but as he continues on that mission, let us unveil to you his unlikely path of becoming the richest black American in the world.
Robert F. Smith Secured About Four Patents While Working as an Engineer in His Early Years
Some billionaires owe their massive fortune to family inheritances while some others are entirely self-made. Robert F. Smith falls into the latter category as he hails from a humble background of two academicians and showed much promise and enterprise early.
As a young boy, Smith excelled in his advanced maths and computer science classes and was able to badger his way into an internship program at Bell Labs, a program originally intended for college students. Smith would go on to retain that internship all throughout his college studies at Cornell University before obtaining a degree in chemical engineering in 1985. Over the next decade, he was able to secure paying jobs with companies such as Goodyear Tire and Rubber Company, and Air Products & Chemicals Company.
Another company that Smith worked for during this period is food manufacturing and processing conglomerate, Kraft Foods. During his time with the company, he was especially industrious and was part of teams that patented a coffee brewing method (in April 1995) and a coffee filtration system (in 1993). Given such achievements, one does not need to be a magician to figure out that Smith earned some impressive salaries during his time with Kraft Foods.
Smith Advised on Billion-Dollars Mergers and Acquisitions After Moving to Goldman Sachs
Following his fruitful spell as an engineer, Robert F. Smith decided to put the MBA he had gained from Columbia University in 1994 to good use. To this end, he joined the foremost investment bank, Goldman Sachs, in 1994 and proceeded to spend seven years with them.
During his time there, Smith focused on mergers and acquisitions of technology and software companies, and variously worked at their New York City and Silicon Valley offices. He advised on M&A deals worth $50 billion pertaining to companies such as Apple, Microsoft, Texas Instruments, eBay, and Yahoo. He later rose to become the co-head of the enterprise systems and storage-investment banking at Goldman Sachs. Such a prestigious position translated into sumptuous salaries for the young man which were further complemented with his fat end-of-the-year bonuses.
He Moved To Found His Own Private Equity Firm called Vista Equity Partners
Back in 1994, when Robert F. Smith wanted to move into the fast-paced world of investment banking, many of his relatives dithered at the plan. They were concerned for his sanity and advised him against the move. The determined young man refused to cave in though and went on to prove the naysayers wrong. The same pattern would repeat in the year 2000 when Smith decided to walk away from his lucrative job at Goldman Sachs and strike out on his own. Many of his colleagues thought he was crazy, especially seeing as Goldman had just gone public, and begged him to have a rethink. He refused to do so and has gone on to conquer once more.
From its humble beginnings in 2000, Robert F. Smith has been able to grow Vista Equity Partners into one of the best-performing private equity firms in the world. Buoyed by their vision of investing in companies that use tech to promote economic equity, diversity, and ecological responsibility, the company has grown into a juggernaut that employs 70,000 people worldwide. They have supervised 455 completed transactions worth $155 billion and now manage $73 billion in assets. With over 60 companies on their rooster, Vista Equity Partners has consistently posted annualized returns of 22% since inception.
Robert F. Smith Has Used His Wealth To Do A Lot of Good in Society
With a net worth of $6 billion, Robert F. Smith is not just the richest African American in the world but also one of the three richest black people on the face of the earth. Such an exalted status comes with the perk of living the good life and the CEO is not sparing any expenses. He owns several properties in places such as New York City, Malibu, and the French Alps. He also splashed out some major bucks during his 2015 wedding to fashion editor, Hope Dworaczyk. The luxurious affair took place on the Italian coast of Amalfi and featured a parade of celebrity guests.
Beyond this, Smith is also a noted philanthropist and has given to several causes, specifically those that benefit the African-American community. For instance, he has supported breast cancer and prostate cancer research with millions of dollars as it mainly affects black people. He also delivered the commencement address at the graduation ceremony of an HBC, Morehouse College, in 2019. On that occasion, Smith promised to pay off the entire student loans of the 396 graduating students. He later extended the largesse to even the parents of the graduating students and ended up shelling out $34 million for the whole thing.
The Vista Equity CEO was Embroiled in the Largest Tax Evasion Prosecution in U.S History
Throughout his life, Robert F. Smith has firmly stayed on the good side of the law. He however found himself on the wrong end of it thanks to his connections with foremost Houston billionaire businessman – Robert Brockman. As the story goes, Smith first met Brockman when he was working at Goldman Sachs. They collaborated severally over the years and by 2000, Brockman offered to contribute hundreds of millions of dollars to enable Smith to start his private equity firm.
This was how Vista Equity Partners was born and Smith became CEO while Brockman was a limited partner. It later emerged that the Houston businessman was using the collaboration as part of a scheme to hide about $2 billion in income from taxation. The authorities eventually caught up with Brockman and their investigations also revealed that Smith had not paid taxes on about $200 million worth of income. They offered Smith a none-prosecution deal (NPD) under which he agreed to testify against Brockman in exchange for not being prosecuted. He also paid about $139 million in taxes and penalties as well.
Key Takeaways
- Robert F Smith is the richest African-American in the world with a net worth of $6 billion.
- He first made his mark during his years as an investment banker with Goldman Sachs.
- Smith is now the founder and CEO of one of the best-performing private equity firms in the world, Vista Equity Partners.
- He is noted for his philanthropy and has supported education, arts, and scientific research with millions of dollars. He is also the first African-American to sign the Giving Pledge, committing to giving away half of his wealth to charity in his lifetime.
- The ace investor has faced allegations of tax evasion but was able to escape prosecution.
