J. Ezra Merkin

Jacob Ezra Merkin (born April 19, 1953) is an American investor, hedge fund manager and philanthropist.

From 1979 to 1982, he worked for the law firm Milbank Tweed.

He worked at Halcyon Investments from 1982 to 1985.

He moved on to Halcyon, a hedge fund run by Alan B. Slifka, his father's friend.

There he met Joel Greenblatt, who founded Gotham Capital in 1985, where Merkin worked until 1988, as an analyst and a managing partner in Gotham Capital LP and Ariel Capital LP.

In 1988, he started Gabriel Capital to raise capital, and funnel it to managers in exchange for a fee.

In 1988 he was indicted for insider trading, convicted in 1990, and in 1994 jailed for a year.

In 1988 Merkin began putting a substantial portion of the money he raised for Gabriel Capital with Teicher.

From 1988 to 1998, Teicher actually managed Merkin's off-shore, Ariel fund and Gabriel Capital.

Merkin "occupied himself primarily with raising money for the funds using his extensive social and professional network."

While in jail, Teicher was running about $375 million from Merkin's investors.

By 1992, Merkin was raising money and co-managing securities with and for Stephen A. Feinberg, a manager whose private-equity firm Cerberus Capital Management, later bought controlling shares in Chrysler (80%) and GMAC (51%, at a cost of $6.4 billion), the financing arm of General Motors.

Merkin invested his funds into Cerberus and its portfolio companies.

His Gabriel fund invested $79 million in Chrysler, $66 million in GMAC, and $67 million in Cerberus partnerships, according to year-end statements.

Although Cerberus lost its controlling stake in Chrysler, ultimately, investors in Chrysler and GMC received more than their investment back in proceeds.

In 1995, he paid $11 million for an 18-room duplex formerly owned by Ron Perelman, a member of his synagogue, at 740 Park Avenue, sometimes referred to as "the world's richest apartment Building."

In January 1995, Merkin took over Teicher's staff, put Gabriel Capital's name on the door, and hired Nathan Leight to manage the money.

Teicher had told Merkin not to invest with Madoff because such steady returns were impossible.

After Madoff's arrest, Teicher immediately sent some emails to Merkin:

In August 1998, Merkin again hired Teicher to manage about $1 billion as an independent operator, paying him $1 million a year plus incentives.

In 2003, he began to collect 12 Mark Rothko paintings, the largest private collection in the world, worth an estimated $150 million.

In 2005, Cerberus and Gabriel bought a 9.9% combined interest in Bank Leumi, but in April 2009, decided to sell to boost liquidity due to their substantial financial losses in 2008.

Merkin managed Ascot Partners LP, a hedge fund which was valued at $1.8 billion prior to the collapse of Bernard L. Madoff Investment Securities LLC.

In 2006, Cerberus appointed Merkin as nonexecutive Chairman of GMAC, a large investment for Cerberus.

This investment was nearly a washout, but ultimately Cerberus investors recouped their capital.

He had been a fund manager and capital raiser until 2008 when one of the funds in Gabriel Capital LP, his $5 billion group of hedge funds became insolvent because a large portion of its assets was invested with the convicted Ponzi scheme operator Bernard Madoff.

The fallout from his investment with Madoff has been extensive.

He navigated a series of lawsuits without a finding of fraud or knowledge of the scheme, but agreed to repay any fees earned from the investment in Madoff historically.

He had to resign a series of positions including his role as non-executive chairman of GMAC.

Merkin is the son of prominent businessman Hermann Merkin and Ursula Merkin (née Ursula Sara Breuer), both German-born Orthodox Jews who fled Germany prior to World War II to escape Nazism.

Merkin's sister is Daphne Merkin, a writer.

He and his wife, Lauren, have four children.

The Rothkos were sold in 2008, under an agreement with the receiver, for $320 million.

Merkin also owns a home in Atlantic Beach, New York, valued at $1.7 million, and a property in Eagle County, Colorado, worth $506,000.

"It's very, very difficult for Ezra to make decisions. He worried about the big picture, fretted over allocations. His gift was that he was a world-class salesman. He recognized that many people didn't have (investment decision) confidence, that if people had confidence in him, then he could give them confidence," said one money manager who worked with him over the years.

On May 20, 2009, he resigned as President of Fifth Avenue Synagogue, which was founded by his father in 1959.

Members include some of his largest Madoff-related investors, losing in total, more than $1 billion.

Merkin attended Ramaz, an Upper East Side Modern Orthodox prep school, Yeshivat Kerem B'Yavneh and Yeshivat Har Etzion yeshivas in Israel, then Columbia University and Harvard Law School.

However, in January 2009, Merkin had to resign from his chairmanship as a condition of the U.S. Federal Reserve granting GMAC bank holding company status, so it could obtain access to bailout money.

Victor Teicher specialized in merger-related investments.