SUFFOLK CLOSEUP
By Karl Grossman
Louis Moore Bacon, the billionaire hedge fund manager who owns Robins Island, is closing his hedge fund. But, according to The Nature Conservancy, with which in 1997 Mr. Bacon arranged a conservation easement for the island, the preservation of Robins Island will remain as it has been.
This is because, explains Joseph Jannsen, conservation lands director for The Nature Conservancy of Long
Robins Island is a 435-acre island in Peconic Bay by the eastern end of Long Island off the coast of New Suffolk, New York. The island is privately owned and not accessible to the public and is within the jurisdiction of the Town of Southold in Suffolk County, New York in the United States. Wikipedia Island, the conservation easement runs “in perpetuity.”
No matter who owns the island, he said, “the conservation easement stays with the property.” It provides for preservation of the “vast majority” of the 435-acre island between Great Peconic Bay and Little Peconic Bay.
All that is not covered by the easement are some “small areas” on which several buildings on the island sit and land otherwise “disturbed.” But “approximately 90 percent of the island is preserved in perpetuity,” says Mr. Jannsen.
Although Mr. Bacon, 63, is closing his hedge fund, he remains one of the world’s richest people—the “707th richest person in the world,” according to Forbes magazine. His net worth has been put at $1.7 billion. Moreover, he is a dedicated environmentalist who since acquiring Robins Island has been committed to its preservation as well as preservation of land facing it on the South Fork and North Fork which he subsequently bought.
Robins Island was once envisioned, as described by then Suffolk County Legislator Steven Englebright of Setauket, now a State Assembly member and chair of its Environmental Conservation Committee, as the “crown jewel” in the Suffolk County parklands and open space programs. It’s “our Yosemite,” he said.
In 1989, under then Suffolk County Executive Patrick Halpin, the county was in
the process of buying Robins Island—something environmentalists had sought for decades.
“Suffolk County Agrees to Buy Robins Island and Preserve It,” said the 1989 headline in The New York Times. The article quoted Mr. Halpin (now chairman of the Suffolk County Water Authority) as saying: ”You’re not going to see bulldozers plowing through Robins Island. It is a virtual time capsule of Long Island’s natural and human history.”
The price was $9.2 million and the transaction was with Herbert Mittermayer and his son, Claus, both of West Germany, who speculated on offshore islands and bought Robins Island for $1.3 million in 1979. The Times in a later piece reported how the Mittermayers had been “offering it to everyone from Prince Moulay Abdullah, a brother of King Hassan of Morocco, to Donald J. Trump and finding no buyer.”
Then in 1990 Republican Robert Gaffney defeated Democrat Halpin for county executive and he scuttled the Robins Island deal that Mr. Halpin had signed. Mr. Gaffney maintained that he wanted to save the county money.
Meanwhile, the Mittermayers filed for bankruptcy for the entity through which they owned Robins Island, Southold Development Corporation. The future of Robins Island then landed in U.S. Bankruptcy Court and Mr. Bacon entered the picture offering to purchase Robins Island for $11 million and to join with The Nature Conservancy to preserve it.
And he and The Nature Conservancy have.
“Billionaire Investor Louis Bacon Closes Hedge Fund To Clients,” was the headline on Forbes magazine website last month. “Legendary investor Louis Bacon told his investors…that he would be closing his big multi-manager hedge funds, another signal of the increasing difficulty traders are having making hedge fund strategies work,” began the article.
Incidentally, for readers who don’t understand what a hedge fund is, a definition by Investopedia online is: “Hedge funds are alternative investments using pooled funds that employ different strategies to earn active return, or alpha, for their investors. Hedge funds may be aggressively managed or make use of derivates and leverage in both domestic and international markets.” Does that explain things? Not for me either.
But Mr. Bacon did understand how a hedge fund works. As CNBC has reported, he “founded Moore Capital in 1989 with a $25,000 inheritance from his mother” and “rose to Wall Street fame making bets on everything from U.S. equity to European bonds and Asian currencies based on global events.” And he “is considered one of the most successful traders of his era.”
As to his environmentalism, an online biography by writer Allen Salkin about the “reclusive” North Carolina-born father-of-four —titled “Bringing Home Bacon”—notes: “He has permanently conserved nearly 1,000 acres of pristine East End land worth an estimated $85 million, signing away development rights and granting stewardship to environmental groups. Thanks to him, some of the most valuable real estate in the world will remain home to ospreys, deer and mud turtles.”
Karl Grossman is a veteran investigative reporter and columnist, the winner of numerous awards for his work and a member of the L.I. Journalism Hall of Fame. He is a professor of journalism at SUNY/College at Old Westbury and the author of six books.