Book Review: Towers of Gold

Towers of Gold is a biography of Isaias Hellman, written by his great, great-granddaughter. I got interested in it because I knew of the tale of Warren Hellman (one of Isaias’ descendants) who was a prominent financier, athlete and philanthropist in San Francisco in the 20th century. Warren started the private equity firm Hellman & Friedman, the VC firm Matrix partners, the music festival Hardly Strictly Bluegrass and was also a terrific athlete in his time, having played water polo at Berkeley, run the Western States 100, rescued Sugar Bowl, etc. What I didn’t know was that one of his forebears was a pioneering influence in California – starting Wells Fargo Bank, USC, owning huge tracts of land in LA and Tahoe… and generally financing the development of everything from the LA water system to oil fields to railroads and wineries.

While reading the biography, I tried to think about what lessons I could draw on from Isaias’ life. Here are a few –

  1. Was on the bleeding edge of something. In this case, he was in California when it was just developing. Lots of dynamism is important for moving up.
  2. Initial prominence led him into an important group of friends, who subsequently proved to be pivotal to business dealings. Reickendorf aristocracy. Strauss, Haas & Bixby.
    1. Marriage into the Lehman family seemed pretty crucial and helpful. Even if not directly. In general had family relations to rely on.
    2. Impossible to untangle the business dealings themselves from the relationships – did the success lead to the relationship? Or did the relationship breed success?
  3. As an investor, aggressive in scope, but very cautious in terms of leverage/downside management
    1. Always had wayy too much cash on hand and was the guy that survived panics. Cautious compounder vs. Henry Huntington building railroads
    2. At the same time, had pretty grand ambitions in scale – uniting railways, purchasing huge amounts of land cheaply – based on understanding and scale
    3. His position gave him exposure to understanding things, then later used understanding in huge scale – bought land in front of the railroads and understood scale benefits to uniting railways… initial LA trolley leads to nothing but then HHuntington in SF then leads to formation of Pacific Electric
    4. Reputation matters – over time his name became an imprimatur a la Buffett
    5. Security is vital to finance – after SF fire, had all the ledgers put in the vault and hoped vault was fireproof
  4. Serious but it wasn’t all about business – followed his personal desires
    1. Enjoyed Lake Tahoe so bought 2 miles of lakefront even though it was hard to get to. Wine-making…
    2. Traveled in reasonable style and wife became prominent in society..
    3. Dabbled in a ton of different stuff (land, banking, trolley lines, oil, university, water corporation)
  5. Wasn’t able to leverage himself, in terms of developing lieutenants, that well. Other than maybe his son.
    1. Nevada Bank depended heavily on his deal-making
    2. Criticized his brother Herman a lot
    3. Was betrayed by Fleischman

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