Centaurus Advisors, which posted eye-popping returns and led him to become the youngest billionaire in the US in 2007. Arnold was raised in Dallas, Texas, and he was the younger of two sons. Hard-working business innovator Daymond John has been known to say that he is "retired" because hes doing what he loves - helping other people succeed. The WIRED conversation illuminates how technology is changing every aspect of our livesfrom culture to business, science to design. One is literally betting on ones research.. (After an external and internal review, The BMJ published a correction but chose not to retract the investigation. That's what the Arnold Foundation did last week, when it announced that it would be combining its philanthropy and political giving under Arnold Ventures. John Arnold got his start as a natural gas trader at Enron. For two years he had sent out grant proposals for his software project. If Arnold decided he wanted to beat hunger, DAgostino says, I wouldnt want to bet on hunger., For all the swagger of that description, Arnold himself has virtually none. Given our enormous appetite for policy change, and given the fact that we thankfully are not constrained by one structure, we dont have resources channeled only to the C3. While the industry as a whole and Centaurus itself have evolved dramatically since our inception, the uncompromising focus of the . [47], John Arnold and his brother Matthew[48] tore down historical homes in the River Oaks neighborhood of Houston which led to criticism by architectural conservationists. We support the principles of individual liberty, a free market economy and limited constitutional government: These are the cornerstones of American society. On some days at Enron, Arnold would trade more than a billion dollars worth of gas contracts. He also created Arnold Ventures, a philanthropic investment firm focused on health . By the time he was 14, Arnold was running his first company, selling collectible sports cards across state lines. John Arnold. As Nosek tells it, John Arnold had read about the Reproducibility Project in The Chronicle of Higher Education and wanted to talk. Inside the Secretive Life-Extension Clinic. Former The 13 Best Electric Bikes for Every Kind of Ride, The Best Barefoot Shoes for Walking or Running, Palantirs Plan to Decipher the Mysteries of Long Covid. These critiques of science amounted to a deep philosophical quandary for the Arnolds, philanthropists who had dedicated their lives to a data-based approach to giving. In everything they do, they want to be evidence-driven, says Stuart Buck, vice president of research integrity at the Arnold Foundation. Of course, this new LLC model comes with the cost of losing the Arnold Foundations tax exemption. The development of regulation around the philanthropic sector throughout the 20th century may have formed the modern nonprofit organization, but it only codified what had been thriving in America since before the American Revolution. Centaurus will be returning capital to investors, according to a Reuters report that cited an unnamed investor who said the wind-down was described in a letter sent by Arnold to investors. Laura and John Arnold have a net. But he also stood out for his skepticism. You have 3 free articles remaining. Were not looking to create an organization of safe success, she says. The Center for Open Sciences next big undertaking is another reproducibility projectthis one for cancer studieswhich recently revealed its initial findings (two of five studies yielded the same results the second time around). [3] [8] His father was a lawyer and died when Arnold was 18. John Arnold, a former Enron trader and hedge fund honcho known as the "king of natural gas", . For us, the principle of it is unchanged. Arnold graduated from Vanderbilt University in 1995, taking only three years to finish his degree. Legendary natural gas trader John Arnold is closing down his flagship Centaurus fund, sources said o n Wednesday, ending an era in which the former Enron wunderkind defined the high-risk, big . This article appears in the February issue. The Search for Long Covid Treatments Takes a Promising Turn. Ioannidis, whose name is almost synonymous with scientific skepticism, says he has seen immense progress in recent years. But as it happens, Nosek is just one of many researchers who have received unsolicited emails from the Arnold Foundation in the past few yearsresearchers involved in similar rounds of soul-searching and critique in their own fields, who have loosely amounted to a movement to fix science. [43], John received an $8 million dollar bonus from Enron just before the company filed for bankruptcy. He is the Executive Director of the Global Health Security Fund, a Geneva-based nonprofit that supports impact investment in global health security innovation. If they wanted to embark on truly transformational change, as their foundation literature states, it wouldnt be enough to properly evaluate this or that education or criminal justice program. You dont shift a culture overnight, Nosek says. Like a number of up-and-coming researchers in his generation, Nosek was troubled by mounting evidence that science itselfthrough its systems of publication, funding, and advancementhad become biased toward generating a certain kind of finding: novel, attention grabbing, but ultimately unreliable. Now hed have to rely purely on his prowess with data. [3][8] His father was a lawyer and died when Arnold was 18. That way, it would be harder for them to go back and cherry-pick their sexiest data after the factand easier for other researchers to come in and replicate the experiment later. Arnold entered the investment industry out of college by working for Enron, the infamous natural gas conglomerate that collapsed in 2001 following revelations of its vast accounting fraud. Ludwig is a native of Orange County, California,. Stem Cell Junk Yards Reveal a New Clue About Aging. But as many Wall Street veterans can testify, betting against John Arnold is usually a bad idea. Hockey cards didnt have much of a market in Texas, he tells me. Republished Laura and John Arnold, Houston $285 million. Arnold was given $8 million, the biggest payout of all, just days before Enron filed for bankruptcy. Arnold says he wasnt sure if he could match the success hed enjoyed as a futures trader at Enron. Written. Because investigating and replicating research begins with having the data and materials necessary to do so, he is particularly focused on making science more transparent. Still, Arnold, an intense worker with a wide network of. What does that say about American philanthropy? She and her husband John,. For a look . On Fishbowl, you can share insights and advice anonymously with Centaurus Advisors employees and get real answers from people on the inside. In 2013 they donated $10 million to keep Head Start, the early-childhood education program for low-income kids, running through the federal government shutdown, and many of the issues theyve taken on, from criminal justice reform to making prescription drugs more affordable, are decidedly progressive. All Rights Reserved. In 2008, the young trader is among the top three traders who earned the most money, his salary amounted to $ 1.5 billion. Mr. Arnold is also Founder of Centaurus Capital LP, a family office investment fund with a specific focus on the energy industry. Form 990s and Section 501(c) of the U.S. Tax Code were created in 1954, followed by rules governing private foundations in 1969. In 2015, after a cancer researcher was found to have falsified research data and defrauded the government out of millions of dollars, Arnold complained on Twitter that the penalty, a five-year funding restriction, was too light. Several other Houston area billionaires made their money during a record year for oil and gas, such as George Bishop, who. Longevity evangelists are injecting people with experimental gene therapies. But figuring out which organizations were most effective turned out to be vexing. Yellen warned inaction could have wide-ranging financial repercussions, including on taxpayers and the federal governments credit rating. Plus, systems of prestige and advancement die hard. To revist this article, visit My Profile, then View saved stories. [2][3][4][5][6][7] He now focuses on philanthropy through Arnold Ventures LLC. It became extraordinarily frustrating.. Compared with the IRS-mandated transparency of a private foundation, 501(c)(3) public charity, or 501(c)(4) social welfare organization, private companies are black holes for public disclosure. Whole He was an entrepreneurial kid, earning some $50,000 before leaving high school by marketing collectible sports cards in the internets early years. A new study shows are the four most dangerous words, Arnold wrote on Twitter. He is unapologetic about having worked at Enron, and he can be defensive about the moral standing of Wall Street in the public mind. [23] Arnold has also given to The City Fund, an organization focused on growing the number of charter schools in the USA, and its political arm, Public School Allies. In 2012 the former head of cancer research at the biotech firm Amgen revealed the results of the companys effort to replicate 53 landmark papers in hematology and oncology; only six studies findings could be confirmed. His mother was an accountant (she would later help manage the books at his hedge fund). When we started as solely a foundation and we had a C4 that was kind of ancillary to it, we respected the distinction and division the law requires. Believing that transparent markets empower businesses, economies, and communities, Natural Gas Intelligence (NGI) provides natural gas price transparency and key news, insights and data for the North American energy markets. The Arnolds had already decided that, with decades of life ahead of them and almost unlimited resources, they had the time and money to evaluate charitable programs properly, even when that meant paying for expensive randomized controlled trials that could take years to complete. info@naturalgasintel.com | Previously, Mr. Arnold founded and was CEO of Centaurus Energy, a multi-billion dollar energy commodity hedge fund. (WIRED wrote about NuSI in issue 22.09). The Arnold Foundation has been the Medici of meta-research, Ioannidis says. The philanthropy's core mission is to invest in evidence-based solutions that maximize opportunity and minimize injustice. Will WIRED may earn a portion of sales from products that are purchased through our site as part of our Affiliate Partnerships with retailers. All Rights Reserved. Researchers say viruses can kill antibiotic-resistant microbes and help treat infections. A Google search told him that the Arnolds were a young billionaire couple in Houston. Bothersome bureaucracy notwithstanding, tax exemption and tax deduction are tangible benefits that acknowledge that compact. At the time, his net worth was estimated to be around $3 billion. [25][1] The organization was founded in 2010. While. Arnold was not criminally charged with any wrongdoing at Enron, but he was named in a bankruptcy lawsuit by other Enron staff. As a kid, Arnold's earliest trades included buying hockey cards in Texas and selling them in Canada. Unlike Tom Steyer, a billionaire who earned his wealth investing in oil and natural gas and now hypocritically blames those commodities for devastating the planet, John Arnold says little about climate change. It completely transformed what we could imagine doing, Nosek says. Let us know if we're missing any workplace or industry recognition - Add Awards. His net worth of $10.2 billion landed him at No. But compared with the benefit of near-total anonymity, wealthy elites like the Arnolds are forgoing the tax advantages of a foundation or traditional nonprofit to further withdraw from public scrutiny. They internalize the risk of mistaking correlation for causationnot because theyre smarter than scientists but because they have money riding on the outcome. Its a stupid little badge, Nosek says, but it works. As Enron neared bankruptcy, executives scrambled to hold its operation together, offering bonuses to keep traders on board. Usually the division of labor in most of our work is that I talk, Laura Arnold says in a phone interview. InfluenceWatch Podcast #267: Weingarten Will Not Be Apologizing. Weve always wanted to improve peoples lives. In 2011 Centaurus Energy Master Fund LP was fined $75,000 by the New York Mercantile Exchange for violating position limits in natural gas trading (see Daily GPI, Dec. 28, 2011). The tech giant is helping researchers and clinicians decipher vast amounts of data generated by people with persistent symptoms. It was just a way for us to just all be under one umbrella, and everybody does what he or she needs to do in furtherance of one mission. And good traders, as Arnold sees it, naturally come to appreciate something that researchers too often miss: Its very easy to be fooled by your own data. "[13][14] When Enron collapsed, he was not accused of any wrongdoing. Its probably too big a lift for us to expect were going to change researchers who have been around for decades, he says. Why he started his own firm energy trading firm, Centaurus Advisors, and why he ultimately hung it up as a trader to focus all of his energy on philanthropy. [35], In 2019, the organization was transformed into a limited-liability company composed of the former foundation, a donor-advised fund, and the Action Now Initiative advocacy organization, effectively combining philanthropy, research, policy, and advocacy efforts. At age 38, Texas billionaire John Arnold decided to step away from high finance. In the past ten years, we have achieved more success than I could have hoped for or imagined. If John Arnold . Dr. Andrew Nerlinger is a physician, venture capital investor, and social impact innovator. However, after 17 years as an energy trader, I feel that its time to pursue other interests, Arnold wrote to investors in a letter obtained by NGI. Arnold estimates that he made $50,000 before he finished high school. For one thing, the problems plaguing scientific research are now increasingly well known. Philanthropist John Arnold is pictured in this photo provided by the Laura and John Arnold Foundation on July 10, 2018. . We asked ourselves, What is the point of having two separate entities? It is the essential source of information and ideas that make sense of a world in constant transformation. [51] They have three children. At the Center for Open Science, Nosek has already begun to experiment with new incentives for scientists. When Mr. Arnold, 31, created Centaurus in 2002 with $8 million of his own money, the energy trading industry was on its knees, incapacitated by the fraud and irrational exuberance at Enron.. But thats not what this project was about. The National Institutes of Health is moving forward with new requirements for data sharing; starting as early as this year, all NIH-funded training programs must include plans for teaching researchers the principles of reproducibility. Then, one day in November 2011, he was listening to the podcast EconTalk, hosted by libertarian economist Russ Roberts. Hide Background LAURA AND JOHN ARNOLD FOUNDATION Family foundations They are on record as agreeing with some of the critiques and focus on partnering with organizations to maximize their impact without undue influence. But some experts are critical of this shift away from traditional giving, seeing in it a worrying trend in modern philanthropy. [33] Were looking to create an organization of thoughtful failure and fantastic success., If John Arnold does have an identifiable ideology, it is that of a lifelong trader and quant: unsentimental, metrics-focused, interventionist. 2023 Forbes Media LLC. 1. The incentives to produce positive results were so great, Nosek and others worried, that some scientists were simply locking their inconvenient data away. Mr. Arnold serves on the boards of Breakthrough Energy Ventures, an investor-led venture capital firm dedicated to funding transformational technologies that will reduce global greenhouse gas emissions; Civica, Inc., a nonprofit generic pharmaceutical company; and The City Fund, a nonprofit dedicated to supporting new governance models in K-12 education. The Centaurus founder could probably point to trades that made him a ton of money but you really can't put a price on avoiding the humiliation that would've come from . . As far as big dollar donors go, John Arnold and his wife, Laura, are not well known to conservatives. |, Related topics: Centaurus Capital LP has committed around $500 million in equity for EOC Partners, according to the . Abandoning traditional nonprofits in favor of LLCs may be the ultimate expression of donor privacy under the First Amendment, but it also means rejecting our philanthropic institutions at a time when so much of the nonprofit landscape is made up of policy groups. A hugely successful energy trader, Arnold once worked at Enron, earning the disgraced company a reported $750 million the year it went bankrupt. In 2007, Arnold became the youngest billionaire in the U.S.[1] His firm, Centaurus Advisors, LLC, was a Houston-based hedge fund specializing in trading energy products that closed in 2012. Yet the foundation is also focused on reforming what the Arnolds see as a broken public pension systema project that, in practice, usually means cutting payments to retirees, raising retirement ages, and switching new workers to 401(k)-style plans. Late on Saturday, September 16, Amaranth's senior energy trader Brian Hunter asked John Arnold, Centaurus CEO, whether the hedge fund would like to make a bid for some of Amaranth's positions. He has also served as the Investment Manager for the Laura and John Arnold Foundation since 2011. Constitutionalists would add that the entire relationship is hedged in by the First Amendments guarantee of free speech, lest disclosure rules encompass an individuals right to support lawful causes of their choosing without facing public backlash for holding unpopular opinions. That focus led Rolling Stone to call Arnold a young right-wing kingmaker with clear designs on becoming the next generations Koch brothers. (In 2015, Bloomberg suggested that Arnold may have somehow managed to become less popular as a philanthropist than he was as a billionaire trader. Ask a Question. . And though the fund bounced back the next year, tighter regulations on trading and a far less volatile marketthanks to a growing supply of natural gas from shale rockmade it unlikely that Arnold would again see the astonishing returns of only a few years earlier. The No. And in 2015 the Arnold Foundation paid journalist Nina Teicholz to investigate the scientific review process that informs the US Dietary Guidelines. [emphasis added]. Arnold was described as unapologetic for his success in Enrons final days. View Subscription Options Form Arnold has said that the first phase of his life was 100 percent trying to make money and that its now 100 percent trying to do good.. Wealth: $3.3 billion. All these things that we thought we knewwhen we step back and look at the evidence baseits just not there., Rolling Stone called Arnold a young right-wing kingmaker with clear designs on becoming the next generations Koch brothers.. By recreating an early state of matter called the quark-gluon plasma, scientists hope to understand the conditions that made the universe what it is today. Centaurus Advisors Awards & Accolades. Arnold founded Centaurus with an $8 million employee bonus from Enron. Centaurus Energy Master Fund LP, a Houston-based energy hedge fund that was founded by John D. Arnold after the collapse of Enron Corp., was fined $75,000 by the New York Mercantile Exchange . [37] He proposed that foundations and DAFs should spend at least 7% annually, which would result in billions of dollars more being given to charities,[30] and that DAFs should be legally held to an annual minimum distribution. ISSN 2577-9877 The articles have to appear methodologically sound, but this is generally a lower standard than being completely convincing. Arnold says that now, unless he trusts a researchers work, he no longer believes the findings of any scientific study until he or someone on the staff carefully vets the paper. In recent decades, math and science whizzes like Arnold have invaded Wall Street, bringing a level of scientific precision to trading and often making fortunes in the process. While this private company, Arnold Ventures, is structurally indistinguishable from any other for-profit corporation, its purpose is strictly philanthropicbut it comes with key advantages. By the time he was 14, Arnold was running his first company, selling collectible sports cards across state lines. The BMJ investigation, in turn, met with angry denunciations from nutrition experts who had worked on the US Dietary Guidelines; a petition asking the journal to retract Teicholzs work was signed by more than 180 credentialed professionals. FILE - In this Aug. 5, 2009, file photo, John Arnold, then head of the hedge fund Centaurus Advisors of Houston, testifies before the The Commodity Futures Trading Commission in Washington,. Nosek was so taken with the importance of redoing old experiments that he had also rallied more than 50 like-minded researchers across the country to participate in something he called the Reproducibility Project. And Noseks project was an attempt to head it off at the pass. We can feed off that. Figuring out exactly which rewards work best and how to simultaneously change the incentives for researchers, institutions, journals, and funders is now a key area of interest for Goodman and Ioannidis. (Arnold was not involved in the fraud.) The foundational studies, Taubes said, looked at the diets and disease rates in various countries, then essentially guessed at which items in the diet were responsible for the countrys good or bad health statistics. The journals Science and Nature have started bringing in statisticians to review their papers. Centaurus Advisors - John Arnold assets under management (13F Holdings), latest news, 13D/G filings, and investor letters provided by Insider Monkey The picture Taubes painted wasnt of a flawed study here or there but of a fundamentally broken scientific culture. Centaurus Capital LP - Company Profile and News - Bloomberg Markets Bloomberg Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately. So he ran his projects on a shoestring budget, self-financing them with his own earnings from corporate speaking engagements on his research about bias. In exchange for forgoing those revenues, the government requires a certain standard of public accountability for nonprofits, delivered through public disclosure of annual Form 990 filings and limits on political activities. Arnold Ventures' John Arnold: Now is the Time to Reform Charitable Giving Laws. But now they were widening their scope. The comedian John Oliver spent 20 prime-time minutes on HBO last May mocking the reign of terrible science on TV news shows and in public debate: After a certain point, all that ridiculous information can make you wonder: Is science bullshit? 5. In 2002, he founded Centaurus Advisors with $8 millionhis last Enron bonus, paid out just days before the company filed for bankruptcyin Houston, Texas, to invest in futures, options, and derivatives for coal, natural gas, and crude oil. A lot of people didnt know it was out there, Arnold says. Ad Choices, John Arnold Made a Fortune at Enron. Weve always defined success as sustainable change through policy. All rights reserved. In the name of social experimentation, in 2020 Arnold supported Oregon's referendum decriminalizing all drugs, which passed. But given the long history of deep-pocketed business interests sowing doubt in research, his underlying question was a fair one: Who is John Arnold, and why is he spending so much money to raise questions about science? Founded in 1992, Centaurus was formed with a singular focus - to provide unparalleled service, support, technology, and education to independent financial advisers in the securities industry. ), Were not looking to create an organization of safe success, Laura Arnold says. John Arnold. Houston-based Centaurus has been one of the most successful hedge funds in the industry, delivering a compound annual return of about 130% since it was founded by Arnold in 2002 after the collapse of Enron. And those are just a few of the people who are calling out iffy science with Arnold funding. Centaurus Advisors. John Arnold: The most prolific philanthropist you may not have heard of. Prior John Arnold shocked the hedge fund world in 2012 when, at just 38 years old, he announced he would no longer manage other people's money. [50] She was formerly a mergers-and acquisitions attorney in Houston, Texas, and an oil company executive. From the little I know about the science of nutrition, your study makes a lot of sense, Arnold wrote. One of the counterparties Amaranth approached was Centaurus. founded Houston-based hedge fund Centaurus Advisors but retired in 2012 . The more you read the research, the less you know, Arnold says. Just weeks before the federal guidelines were due for an update, Teicholzs blistering report appeared in the prominent medical journal The BMJ, charging that the governments panel of scientists had failed to consider evidence that would have done away with long-held worries about eating saturated fat. Arnold Ventures will likely fund the same formula of political and charitable causes that the Arnold Foundation supported. Centaurus, which started in 2002 with just a handful of traders and now has 70 employees, focuses on this virtual kind of trading. But about an hour in, Massachusetts representative Jim McGovern leaned into his microphone. [34] Arnold also has been an influential supporter of Democrats efforts to pass a drug-price reform bill. His estimated net worth is $3.3 billion as of writing. John Arnold, a highly successful energy trader at 38 years old, earned $750 million after Enron, the company he worked for had . In 2012, the Arnolds joined the Giving Pledge, an oath made by billionaires such as Bill Gates and Warren Buffett to donate at least half of their wealth. Featured groups, golf odds, expert picks plus matchups and props with information you can bet on.