Meet the Freidheims: behind surprise Virgin bidder Cyrus Capital
Little is known about Cyrus Capital ... but Cyrus Freidheim’s self-published book of advice for his grandchildren presents clues.
Two years ago former Chicago businessman Cyrus Freidheim self-published a book of advice for his grandchildren: Notes from Grampa. Preparing for your tomorrows.
Now available on Amazon, Freidheim’s book tells of his success from growing up the tough Irish Catholic neighbourhood on the South Side of Chicago to becoming a senior executive with Union Carbide, Price Waterhouse, the Ford Motor Company, consulting firm Booz Allen & Hamilton, food company Chiquita Brands International and then a final stint, running the Chicago Sun Times Media Group before his retirement to Lost Tree Village in southeast Florida.
Along the way, Freidheim, born in the midst of the Depression in 1935, and his wife Marguerite “Mitzi” had three children — one of whom, Stephen, founded New York-based hedge fund Cyrus Capital, which was named after his father — and emerged as the surprise choice this week as one of two finalists in the multi-billion race for Virgin Australia.
Little is known in Australia about Freidheim and Cyrus Capital beyond the fact that it has been a long-time partner of Richard Branson.
Branson and Freidheim got together in the mid-2000s to set up Virgin America (a deal that went well) and more recently to buy British airline Flybe (a deal which very much didn’t).
But Cyrus’s book — the cover features a glamorous photo of Cyrus and Mitzi and their “beloved” golden retriever Jolie — provides an insight into the Freidheim family and the forces that shaped Stephen Freidheim, whose organisation declines to return calls and emails despite its apparent desire to own the country’s second-largest airline.
“We all start as beginners or apprenticeships at the bottom of the ladder,” Cyrus writes to his grandchildren in the book, which is available for $US48.87 (down from list price of $US100).
Cyrus and Mitzi have three children — the low-key Lynn and Stephen and Scott, hyper-achievers with high-flying careers.
Cyrus graduated from the University of Notre Dame and served for four years in the US Navy, where he became an interpreter in Russian.
His best decision, he says in the book, was marrying Chicago-born and bred Mitzi, mother to their three “almost perfect” children according to Cyrus.
The family moved around following Cyrus in his various jobs, living in Pittsburgh, Detroit, Chicago, Sao Paulo in Brazil, Paris, Greenwich Connecticut and then Chicago again.
Stephen finished high school just north of Chicago and went to university in Yale, where he studied economics before starting his career on Wall Street.
Younger brother Scott, who was born in Dearborn, Michigan when his father was working for Ford, stayed closer to home, going to Northwestern University, with its luxurious country club campus on the shores of Lake Michigan, just north of Chicago.
A talented soccer player, Scott was Northwestern University’s all-time leading goal scorer.
Stephen worked for Kidder Peabody in New York as head of research and trading in high-yield asset management, moving to Bankers Trust from 1993 to 1999, where he was head of the capital markets group and chief investment officer of fixed income.
In 1999 he founded Cyrus Capital Partners, which has an active presence in the US from its base in New York, and Europe from its base in London, now managing more than $US4bn ($5.8bn) in assets.
Scott began his career in investment banking in Chicago, working with John Nuveen and Co before moving to New York to work for Lehman Brothers.
He was executive vice-president of Lehman Brothers Holdings, working closely with Lehman Brothers’ hard-charging chief executive Richard Fuld and holding a number of senior positions before it collapsed in the global financial crisis.
In 2005 he was named a Young Global Leader by the World Economic Forum as a leader in the field of business and has since participated in many panels in the World Economic Forum in Davos, Switzerland.
He is now managing partner of his own investment company, Freidheim Capital.
Scott and Stephen are both trustees of the US Olympic Foundation, whose members include Wall Street find manager Bill Ackerman.
Scott is listed on the US Olympic Committee’s Foundation website as being from Aspen in Colorado while Stephen is listed as living in New York.
Six years after founding Cyrus, Stephen Freidheim joined up with Branson to found Virgin America in 2005.
The two made a windfall when it was sold to rival Alaska Airline for $US2.6bn a decade later.
Freidheim and his wife Amandine, who has been an art history teacher at the Incarnation School in the Bronx, hit the press in America in 2011 when they spent $US27m buying a luxurious apartment on Fifth Avenue.
The 6500 square foot co-op apartment was originally owned by the Kress family which, according to the New York Times in 2007, installed ceilings shipped from a Venetian palace and a marble staircase with marble from the quarry used by Michelangelo.
The apartment was briefly put on the market in 2007 for $US50m but the Freidheims were able to pick it up for almost half that as New York property prices tumbled in the wake of the global financial crisis.
Freidheim drew interest from the British press earlier this year after his investment in British airline Flybe.
Philanthropy
Reporters recalled his luxury apartment at a time when Flybe was pitching for financial support from the Johnson government before going into administration. The Freidheim family are well known for their philanthropy.
Mitzi Freidheim has been a 30-year supporter of Chicago children’s charity Children’s Home & Aid.
Recognised by the charity in 2017, Mitzi said she was “positively blessed with three happy, healthy, good children of whom I am so proud and love with all my heart”.
“I wanted to extend the same love and support for other children and Children’s Home & Aid has allowed me to do that,” she said.
The year before, Stephen was recognised for his philanthropy to Catholic charities in a gala benefit dinner at the Waldorf Astoria.
Stephen has many high-level New York connections, including being a member of the Council on Foreign Relations, and a director of the Peterson Institute for International Relations.
Meanwhile, Stephen has continued to follow in his father’s successful footsteps in business, launching a new bid for Virgin Australia.
Will he succeed?
As his father says in his book: “We are the sum of our choices. Sometimes we get do-overs, but usually not.
“Sometimes we work our hearts out. And sometimes we just get lucky.”
After a good deal with Virgin America with Branson and a bad deal with Virgin Atlantic and Branson with their recent buy into collapsed Flybe, will Stephen Freidheim get lucky this time?
Watch this space.
Father Cyrus and proud mother Mitzi will be too.
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