Ira Rennert

Ira Leon Rennert (born 1934, Brooklyn, New York) is an American investor and businessman. Using junk bonds to finance his acquisitions of companies, often in bankruptcy, Rennert has amassed significant holdings in basic, cyclical industries, such as mining and metals, including lead smelters, coal mines, magnesium producers and vehicle assembly lines. Today he controls one of the nation’s largest privately held industrial empires, and his personal fortune is estimated to be $5.9 billion.

Background and education
Rennert is a graduate of Brooklyn College. He earned his master's degree from New York University's Stern School of Business, where he is currently on the Board of Overseers.
[Rennert house.jpg|thumb|Photograph of Ira Rennert's compound in Sagaponack, New York], as viewed from above

Early career
Rennert started his career as a credit analyst on Wall Street in 1956. He also served briefly as a salesman for a typewriting company and a stock brokerage, before launching his own business, I.L.Rennert & Co. in 1962 based at a Beaver Street office in Lower Manhattan. At this time he was censured by the NASD for operating with insufficient capital. This occurred again in 1963 and as a result, his license was revoked on November 29, 1964, effectively banning him from the securities industry. According to a company spokesman, Jon Goldberg:

'Due to market conditions, the firm found itself in violation of the net capital rule and Rennert raised capital and put it into the firm to bring it into compliance. However, the firm once more fell beneath the net-capital requirements and he shut the company down.'

Rennert was a consultant for the next eleven years (Who’s Who entry) and entered the private equity market. His role was to put together small leveraged buyouts of unwanted companies. In 1975 he bought a sewing machine maker, and a few years later purchased Covert Marine Inc. of Kansas City (forced into bankruptcy in 1992), followed later by a group of hardware stores and lumber companies. In the early 1980s he joined the board of Integrated Resources Inc, a company financed by Michael Milken where he learned the art of raising junk bonds to finance additional acquisitions.

Junk Bond Financing
Milken—as a bond trader for Drexel Burnham Lambert—was successful selling high-risk, high-yield bonds issued by struggling or undercapitalized companies. Before Milken, these were considered ‘junk’ and most investors avoided them, but it was Milken’s innovation that formed a strategy of using these junk bonds to provide capital for corporate raiders to conduct hostile company takeovers. Integrated Resources raised $2 billion in junk bonds financed by Milken but ultimately collapsed amid scandal and defaulted on $1 billion of bond debt in May 1989 (c.f. the 1991 book Den of Thieves about the junk bond scandal). As an outside board member, Rennert was not dragged down by the collapse and began to raise junk bonds on his own behalf to finance acquisitions for Renco.

Rennert's strategy for building Renco was to acquiring all the shares of struggling companies and to finance the acquisition by issuing junk bonds. Along the way, Rennert paid substantial dividends out of the business to himself. In a series of junk bond issues since 1995, Renco’s subsidiaries have borrowed an estimated $1.1 billion and transferred $322 million (29 percent) to Renco Group, according to documents filed with the SEC. Backed by blue-chip mutual funds and hedge funds such as John Hancock Funds LLC and Putnam Investment Management LLC, Rennert now didn’t have to invest much of his own money. His purchase of AM General in 1992 was bought with a down payment of just $10 million. In 1994, Fluor Corp. of Los Angeles sold Doe Run to Renco, with the latter paying $52 million in cash, and approximately $60 million in debt payable over an eight-year period. In 1997, Doe Run went on to pay $247 million for a similarly environmentally troubled lead smelting complex from the Peruvian government, as well as borrowing more money to service its Fluor debt. And in 1998, Doe Run sold $305 million in junk bonds for financing its Peruvian acquisition as well as more lead mines in Missouri (according to Doe Run filings with the SEC). Since 1998 most Renco financings have been bank debt.

WCI Steel
Rennert's first big deal came in 1988 when Renco bought a Warren (Ohio) steel company from its bankrupt parent, LTV Steel Co., for a price tag of $140 million, of which half was paid for with debt. This company then became WCI Steel Inc., and Rennert was able to ultimately sell bonds totalling $300 millon, paying $108 million of the proceeds as a dividend to Renco. Harbinger sold the business to Severstal, a steelmaker based in Russia, which was forced to shut down steel-making operations in the fall of 2008 because of the recession.

Environmental concerns
Rennert was awarded the The Awful Truth Man of Year Award in 1999 by filmmaker Michael Moore, based on a 1996 EPA Report which lists Magnesium Corporation of America as the top single polluting industrial facility in the United States and a second EPA report from the same year which lists Renco Group as the top most polluting parent company (based on total on-site and off-site releases). Doe Run Peru continues to elicit tremendous controversy and criticism. Despite over $100 million of investment in pollution reduction, the site remains heavily polluted and the impact on the local population is severe.

United States

For more detailed information, go to Doe Run Company.

The Renco Group's environmental record has been mixed. In 1998 the EPA placed Renco Group business holdings 10th on the nation's largest polluter list primarily because of emissions from US Magnesium in Utah (formerly MagCorp). (US Magnesium was purchased by Renco in 1989 in the year in which its emissions peaked at 119,000 tons per year.) By 1998, the year the Renco was placed on the EPA list, Renco had reduced emissions at US Magnesium by 50%. By 2005, the most recent year of data released by the EPA, emissions had been reduced by 97%. The suit claimed PCB-laced sludge and dust choked the plant's plumbing, wastewater ponds, landfill and ditches, where contaminants were 12 times the allowed limit for accidental release. The EPA suit, however, remained outstanding until October 2007 when a federal judge ruled against the EPA and the Justice Department and in favor of Renco and MagCorp / US Magnesium.

Today, U.S. Magnesium is the third largest magnesium producer in the world. US Magnesium’s environmental improvements and recent track record have been substantial and include a reduction of emissions by 90% since 2000 (97% since 1989). Also, the energy improvements in US Magnesium’s manufacturing process caused a net reduction of 100,000 tons per year of carbon dioxide emissions. and won an MEP award in 2006 for Environmental Consciousness.

Another US unit of Renco also faced environmental issues in Herculaneum, Missouri and has made substantial improvements. Locals in Herculaneum claimed their children were suffering from lead poisoning traceable to toxic emissions coming from Renco's Doe Run lead smelting plant which had been in operations locally since 1892. In 2000, the EPA and the Missouri Department of Natural Resources tested area lead levels and ordered Doe Run to clean up locations where lead levels exceeded EPA standards. The La Oroya smelter began operations in 1922 and was operated for many years by the Peruvian government until it was sold to Doe Run in 1997.
The Blacksmith Institute has placed La Oroya on its list of ten most polluted places in the world, along with Chernobyl, Ukraine. In August 2007, it was reported that air levels of arsenic levels were 85 times more than the 'safe' level, cadmium 41 times, and lead 13 times more. Water levels of lead exceeded the 'safe' lead level (as established by the World Health Organisation) as well. A study by St. Louis University scientists found that 97 percent of children in La Oroya suffer from mental and physical deficiencies related to their exposure to polluted air. He also ranks #29 on the Jerusalem Post's list of the World's 50 Richest Jews.

Rennert and his wife Ingeborg have made many charitable donations to various organizations. They donated $5 million to establish the Wiesel Center at Boston University and $250,000 to the Lincoln Center. They also gave over $1 million to the World Trade Center Memorial and established the Rennert Entrepreneurial Institute of Sy Syms School of Business at Yeshiva University. They have endowed chairs at several different universities, including a chair in Jewish studies at Barnard College, a Chair in Aging Research at Albert Einstein College of Medicine, a Chair in Stem Cell Biology at Albert Einstein College of Medicine, and the Ira Rennert Professorship of Business at Columbia University.
The Rennert family also funded the construction for a new mikvah at the Fifth Avenue Synagogue, which was completed in May 2010.

Personal life

Family
Ira Rennert is married to Ingeborg Hanna Rennert. Ingeborg, a former airline ticket agent, is a convert to Judaism and serves as the Director of Lincoln Center for the Performing Arts, Inc. They have three children:
*Tamara Rennert Winn
*Yonina Rennert Davidson
*Ari Rennert

Rennert is a member of the orthodox Fifth Avenue Synagogue where he is also honorary chairman.

Houses
Rennert caused controversy among his neighbors by building a beach front home in Sagaponack, New York considered one of the largest occupied residential compounds in the United States. The house outraged locals, who claimed Rennert originally planned to use it as a spa, a hotel, or a religious retreat. Rennert denied such allegations, and the local paper later issued an apology.
Rennert named his home after the adjoining body of water, Fairfield Pond. The house faces the Atlantic Ocean and its grounds measure convert|63|acre|m2. The buildings, which total over convert|110000|sqft|m2, including the convert|66000|sqft|m2|sing=on main house, have an Italianate facade, 29 bedrooms, and 39 bathrooms. The house has a dozen chimneys and a Mediterranean-style tile roof as well as a convert|91|ft|m|sing=on long formal dining room, a basketball court, a bowling alley, two tennis courts, two squash courts, and a $150,000 hot tub. Its property taxes in 2007 were $397,559.00. Based on these taxes, the home is currently valued at $198 million making it the most valuable home in the United States.
Besides his house in Sagaponack, Rennert owns a duplex apartment on Manhattan’s Park Avenue, a home in Israel, and a Gulfstream V jet.