Robert F. Smith, the richest black man in America, made a stunning announcement in a commencement speech when he said a grant is being set up for paying off the student loans of 396 college graduates at Morehouse College. “My family is going to create a grant to eliminate your student loans!” said Smith in a sentence that stunned the crowd at Morehouse College.
The amount of the donation for paying off the student loans is estimated to be valued at $40 million, but the total debt the students have is still being calculated. Some of the graduates were expecting to have as much as $200,000 in student loan debt. “This is my class and I know my class will pay this forward,” Smith commented during the commencement speech.
Morehouse President David Thomas had “no idea” that Smith was going to make this announcement. Thomas told CBS News correspondent Mark Strassmann that this donation will allow the graduates to “pursue their dreams … As opposed to serving the debt.” Morehouse College is known as an all-male historically black college in Atlanta, Georgia.
Smith is the founder of Vista Equity Partners and has a net worth of about $5 billion and Vista Equity Partners is estimated to have about $46 billion in assets under management, according to Forbes’ estimates. Vista primarily invests in enterprise software companies. One of Vista’s most recent wins is Adobe’s $4.75 billion acquisition of marketing automation company Marketo. Vista Equity had taken Marketo private for $1.8 billion in May 2016. So this means that Vista saw a $2.95 billion profit in about two years from that deal alone.
Smith grew up in a middle-class neighborhood in Denver that was predominantly black. And both of his parents have Ph.D.s in education. And when Smith was young, he tried to apply for an internship at Bell Labs while in high school. But the recruiters told him he was too young. That did not stop him though. Smith called Bell Labs every day for five months until they gave him the position.
After high school, Smith went to Cornell to study chemical engineering. After that, he worked at Kraft General Foods and then received a master’s degree in business administration from Columbia. Then he worked at Goldman Sachs in San Francisco where he advised companies such as Apple, Microsoft, and Hewlett Packard.
Since Vista Equity Partners is privately held, it does not publicly report its results, but it is considered one of the best performing private equity firms in the country with annualized returns of over 20% since it was founded.
Vista Equity Partners is not like other private equity firms. Vista generally hires engineers and managers who have to pass personality tests involving technical and social skills rather than seeking Ivy League recruits. This personality test was originally developed by IBM.
Smith is also known for his passion for music. Along with being the chairman of the board at Carnegie Hall — which is one of the most renowned concert stages in the country — Smith restored Lincoln Hills, a resort where famous black jazz musicians performed. Plus he also supports music education and minority entrepreneurship in Austin, Texas and Chicago, Illinois.
In 2017, Smith signed the Giving Pledge — which is a commitment by the wealthiest individuals and families in the world to donate most of their wealth. The Giving Pledge was established by Bill Gates and Warren Buffett.
Further proving his passion for music, Smith bought one of Elton John’s pianos, hired John Legend and Seal to perform at his wedding to actress Hope Dworaczyk. And Smith named his two sons Hendrix and Legend (named after Jimi Hendrix and John Legend).
For years, Smith stayed away from the spotlight. But this year, Smith has been embracing his role as a public figure. Back in January, Smith gave a speech at the World Economic Forum in Davos where he blamed the U.S.-China trade war and the government shutdown as potentially driving a recession.
In 2016, Cornell named its School of Chemical and Biomolecular Engineering to the “Robert Frederick Smith School of Chemical and Biomolecular Engineering” in recognition of Smith. Smith donated $1.5 million to Morehouse in January for funding student scholarships and to set up a new park on the campus. And Smith also made donations to the National Museum of African-American History and Culture.
During the commencement speech at Morehouse, Smith had quoted Dr. Martin Luther King Jr. and cited the 21st-century tech economy as being a “fourth industrial revolution.”
“When Dr. King said that the ‘arc of the moral universe bends toward justice,’ he wasn’t saying it bends on its own accord. It bends because we choose to put our shoulders into it together and push,” said Smith in the speech. “Technology is creating a whole new set of on-ramps to the 21st-century economy, and together we will help assure that African Americans will acquire the tech skills and be the beneficiaries in sectors that are being automated.” Morehouse provided Smith with an honorary doctorate during the ceremony.