Monday, November 14, 2011

The fight of Richard Rainwater's life

The latest chapter of Rainwater's story, told here for the first time, makes painfully clear the democracy of disease. Battling for his life, Rainwater has bankrolled an extraordinary, and characteristically creative, campaign to seek a cure for his rare affliction. But the odds are long. In all probability, there isn't enough time or enough money, even for a one-of-a-kind billionaire.

The golden age of Rainwater Inc.

When Richard Rainwater was once asked that proverbial Barbara Walters question -- What sea animal would you like to be? -- he had a ready answer: "A dolphin. I'm an arrogant mammal in the sea just having a good time."

In the shark-infested waters of Wall Street, Rainwater was instinctive and playful. At the peak of his powers, he personally made Fort Worth, Texas, his hometown, an improbable financial center. Moguls and wheeler-dealers regularly passed through town for a dose of the Rainwater magic. Ambitious young Turks came and stayed for years, learning the deal business before going out on their own.

Rainwater grew up middle-class. His father worked in the family wholesale business, started by his Lebanese immigrant grandfather, which sold combs and other dry goods to retail stores. His mother worked in boys' clothing at J.C. Penney (JCP) for 25 years. The youngest of two sons -- his older brother, Walter, became an engineer -- Rainwater attended public schools and the University of Texas before accepting a scholarship to attend Stanford Business School.

Rainwater first got rich working for the Bass family of Fort Worth. Sid Bass, eldest of four brothers and Rainwater's Stanford classmate, hired him to manage the family's money in 1970, when Rainwater was 26. In 16 years the two men turned the Basses' $50 million oil fortune into about $5 billion, mostly through spectacular investments in public companies. Their flagship deal was Disney -- perhaps "the best deal ever," says Bonderman. Their $478 million investment in the floundering company in 1984 became billions after they used their leverage to install new management. Rainwater had done his due diligence, seeking advice on the entertainment business from Star Wars director George Lucas, among others. So he was ready when Michael Eisner, former studio chief at Paramount Pictures, called to pitch himself for the top job, preaching the virtues of picking someone from the creative side. "The speech was five to seven minutes," recalls Eisner. "It wasn't prepared. There was a three-second delay. And Richard says, 'Okay, sounds right. Great! Let's do it that way.' He made decisions in a nanosecond."

In 1986, tiring of not having the final say (Bass was a more conservative investor), Rainwater took his $75 million share and set up his own shop, 12 floors below where he worked with Sid. That ushered in the golden age of Rainwater Inc., a dealmaking mecca and an investment business unlike any other. Everything about the place was freewheeling, informal, and eclectic. The offices had glass walls without doors, conference rooms lined with whiteboard, and a fitness center. Lunch was catered every day. Rainwater's mom regularly stopped by with homemade Lebanese shortbread cookies. Rainwater leased an entire floor, far more space than he needed, so there were extra offices for whoever might drop in -- for a day, for a few weeks, for a few years. Among the 20 or so people in the office at any one time, few were actually on the payroll. Most were cooking up projects as part of Rainwater's loose confederation of aspiring dealmakers.