Robert Frederick Smith (born December 1, 1962) is an American billionaire businessman and philanthropist. He is the founder, chairman, and CEO of private equity firm Vista Equity Partners.
Smith is calculated to own about 50% of closely held Vista Equity Partners, according to a March 2021 Form ADV filed with the US Securities and Exchange Commission. Vista had $96 billion of assets under management according to the firm’s website in June 2023.
Smith’s stake in Vista is valued using the $7 billion valuation implied by Dyal Capital Partners’ acquisition of a minority stake in Vista in July 2017. The valuation has been uplifted to reflect growth in Vista’s assets under management since that deal.
None of the proceeds from this sale are credited to Smith because his personal take, if any, isn’t disclosed. A 60% discount is applied to Dyal’s valuation of Vista to reflect compensation costs not accounted for in the deal’s structure plus ‘key-man risk’ that is commonly applied to investment businesses that are largely dependent on a dominant individual investor.
He’s calculated to own about half of the firm in this analysis, based on an analysis of ADV filings and stake sales to Dyal.
Smith is also credited with about half of the assets held by the firm’s employees, according to a Bloomberg analysis of Vista’s private fund reporting section in its ADV form.
A person familiar with Vista who asked not to be identified as the information is private has confirmed that Smith owns a majority stake in the firm.
A representative for Smith declined to comment on his net worth in August 2022.
Biography
Smith was born to Dr. William Robert Smith and Dr. Sylvia Myrna Smith, who were both school teachers. He grew up in a predominantly African American, middle-class neighborhood in Denver, Colorado. When he was an infant, his mother apparently carried him at the March on Washington, where the Rev. Dr. Martin Luther King Jr. delivered his “I Have a Dream” speech He attended Carson Elementary School and East High School in Denver.
In high school, he applied for an internship at Bell Labs but was told the program was intended for college students. Smith persisted, calling each Monday for five months. When a student from M.I.T. did not show up, he got the position, and that summer he developed a reliability test for semiconductors. Smith earned a bachelor’s degree in chemical engineering from Cornell University in 1985. In 1994, he received his Master of Business Administration from Columbia University with concentrations in finance and marketing
Career
After graduating from Cornell, Smith worked at Goodyear Tire and Rubber Company, Air Products & Chemicals, and later at Kraft General Foods as a chemical engineer, where he registered two United States and two European patents. From 1994 to 2000, he worked for Goldman Sachs in technology investment banking, first in New York City and then in Silicon Valley. He advised on merger and acquisition activity with companies such as Apple and Microsoft. In 2018, Smith was included in Vanity Fair‘s New Establishment List, which is an annual ranking of individuals who have made impactful business innovations.
Vista Equity Partners
In 2000, Smith founded Vista Equity Partners, a private equity and venture capital firm of which he is the principal founder, chairman and chief executive. According to Black Enterprise magazine, Smith is credited with consistently generating a 30 percent rate of return for his investors from the company’s inception to 2020. As of 2019, Vista Equity Partners was the fourth largest enterprise software company after Microsoft, Oracle, and SAP, including all their holdings. Vista has invested in companies such as STATS, Ping Identity, and Jio. As of 2019, Vista Equity Partners had closed more than $46 billion of funding.
In 2016, Smith was named Private Equity International’s Game Changer of the Year for his work with Vista.
The 2019 PitchBook Private Equity Awards named Vista Equity Partners “Dealmaker of the Year”.
Philanthropy
On May 19, 2019, during his 2019 commencement speech at Morehouse College, Smith pledged a reported $34M in student loan debt, “(including) the debt of parents and guardians incurred” over the educational pursuit of each member of the 2019 graduating class. In a June 2020 report, Time reported the launch of The Student Freedom Initiative, a nonprofit led by Smith, to benefit HBCU students. According to Forbes, “Smith is the first African-American to sign the Giving Pledge, a commitment to contribute the majority of his wealth to philanthropic causes.”
Politics
In December 2022, taking a stand together against increasing instances of racism and antisemitism in the US, Smith joined New York City Mayor Eric Adams, Reverends Al Sharpton and Conrad Tillard, World Values Network founder and CEO Rabbi Shmuley Boteach, and Elisha Wiesel to host 15 Days of Light, celebrating Hanukkah and Kwanzaa in a unifying holiday ceremony at Carnegie Hall. Smith said: “When we unify the souls of our two communities, we can usher in light to banish the darkness of racism, bigotry, and antisemitism.”
Tax evasion
In August 2020, Bloomberg reported that Smith was facing a tax inquiry regarding a potential failure to pay U.S. taxes on $200 million in assets, intended for U.S. charities, that were transferred through offshore entities. In October 2020, Smith reached a non-prosecution agreement with the United States Department of Justice (DOJ), agreeing to pay a fine of $139 million. This agreement came alongside Smith agreeing to assist the DOJ in creating a separate case against Robert T. Brockman, who had been charged with hiding $2 billion in income. According to the DOJ, Brockman, the backer of Smith’s first private equity fund, led him to use the offshore trust that concealed income.
According to reports in Bloomberg and The Washington Post, Brockman approached Smith in the 1990s about creating a private equity fund and offered to back the initial fund. As part of the deal, Brockman required an offshore trust be set up to conceal earnings from tax authorities and avoid litigation in US courts. Brockman also required the first fund to be located in the Cayman Islands and set aside some of the interest earned to protect him against losses. According to The Wall Street Journal and The New York Times, Brockman’s lawyer helped Smith set up the offshore entity.
The reports state that Brockman’s proposal was a “take-it-or-leave-it offer”. According to Smith’s non-prosecution agreement, Brockman dictated “the unique terms and unorthodox structure to the arrangement” and he accepted the offer as a “unique business opportunity he eagerly wanted to pursue”.
In early October 2021, Smith and Brockman were both among those listed in the Pandora Papers revelation, exposing the offshore sheltering of financial assets by hundreds of politicians, businesspeople, and celebrities
Milestones
- 1962 Robert Frederick Smith is born in Colorado.
- 1985 Studies chemical engineering at Cornell University.
- 1994 Joins Goldman Sachs’ technology team in New York.
- 2000 Starts Vista Equity Partners.
- 2012 Buys British financial software maker Misys for $2.1 billion.
- 2016 Gives $50 million to Cornell University.
- 2016 Vista sets $10 billion cap for its seventh buyout fund.
- 2016 Elected chairman of Carnegie Hall’s board of directors.
- 2020 Admits evading taxes for years, pays $139 million fine to authorities.
