The most interesting man in the world isn’t a beer pitchman. He’s a guy who once heli-skied into a British Columbia avalanche and survived despite being buried while two companions died. He tamed an 11,000-acre wilderness, where pumas roamed, into a winery that sells pricey Bordeaux-style blends. He and his wife personally selected each chair and commode for their ultraluxury art hotel in Uruguay.
A Norwegian who was raised in Sweden and schooled in the Canary Islands, Vik attended Harvard, where he won the Ivy League golf championship—twice. He brought up his children in an eight-bedroom Greenwich, Connecticut, mansion that once belonged to a Rockefeller heir, but he claims residence in Monaco. And while he does not drink often, when he does, he prefers Christiania Vodka, made from a 400-year-old recipe that originated in the court of Norway’s King Christian IV. He owns it.
We could go on and on. (His Manhattan art gallery sells 20th-century Italian furniture! His pre-retirement hobby has been playing ice hockey! He comes from a family of fur merchants!) But for most readers the most interesting thing about Alexander Vik, 59, is how he built a personal fortune that Forbes estimates to be at least $1 billion, dabbling in virtually every modern financial bubble—from closed-end country funds to dotcom 1.0 to derivatives—while leaving a small army of investors and business partners fuming in his wake.
It’s a story that’s never fully been told. The secretive Vik hasn’t granted an interview about his business dealings in more than seven years and rebuffed several attempts to contact him for this story. But his 35-year track record reveals a lucky streak that borders on the miraculous. “Alex was a super risk taker, and sometimes these guys can worm out of things,” says Stephen Greenberg, a former general counsel at one of Vik’s insurance companies, who later clashed with his boss in court. “Everything he did was so complicated with so many companies. Trying to get to the bottom of anything would get people very frustrated.”
With a tendency to operate through offshore companies, Vik has bought and sold everything from insurance companies to penny stocks and even once tried to break up French media giant Vivendi. His biggest ventures and bets ultimately failed, yet Vik almost always seemed to come out on top, emerging unscathed and often richer, even as those who invested alongside him were burned.
Harvard itself may be something of a club, but current and former athletes there have cleaved off their own, the Harvard Varsity Club. Among them is Alexander Vik, who came to America for the first time as a member of the Class of 1978. There is a page devoted to him on the club’s website, featuring a photo of Vik. “In business, ‘brand’ is very much in vogue,” Vik notes below it, “and Harvard has the greatest global educational brand and we have to continue to nurture it.”
Vik’s business brand started on Wall Street, where he worked as a broker at firms like Kidder, Peabody during the day and converted Manhattan rentals into condos at night. His big break, though, came courtesy of his wealthy dad, who bought a controlling interest in the Scandinavia Fund and put Vik in charge, with younger brother Gustav riding along as treasurer.
On paper it was a value play. The Scandinavia Fund traded at a discount during the late 1980s, when some closed-end country funds were selling at unjustifiable premiums to their underlying holdings. But in reality, investors claimed Vik tried to turn it into a piggy bank. Under Vik Scandinavia Fund went into cash just before equities in countries like Norway soared.
The fund tried to buy real estate loans from a financial firm that had loaned the Viks money to buy shares of France Fund, another closed-end country vehicle. As the closed-end-fund bubble deflated, minority shareholders sued in 1989 for not fully disclosing the connection between Vik and other financial firms and breaching fiduciary duties. Vik denied wrongdoing, and Scandinavia Fund ended up settling the lawsuits, reportedly for less than $700,000.
No matter. Insurance soon piqued Vik’s interest. Hurricane Andrew, which leveled South Florida, had pummeled underwriters, and the Viks bought up insurance assets. They set up shop in Lawrenceville, New Jersey, and Vik Brothers Insurance was soon writing $300 million of property and casualty insurance premiums, when Vik sold it in 1997 to Highlands Insurance for $100 million. His timing was good: By 2002 Highlands filed for bankruptcy, though Vik Brothers Insurance was not the cause. In another insurance move Vik teamed up with two big insurers from Sweden and Finland and bought Home Insurance Co for $800 million. The insurance companies bought out Vik’s minority stake soon after. Again, good timing. In 1998 Home Insurance failed.
It’s unclear how much money Vik and his family made from their adventures, but Vik emerged unscathed. And he still controlled Scandinavia Fund—his family owned 73 percent—which he had converted into an operating company. Since it still traded on the American Stock Exchange, he now had a public vehicle for dealmaking. And because he based it in the Cayman Islands, his company could operate with more opacity, delaying financial filings with the Securities & Exchange Commission. At first Vik used the firm to run a resort in the Canary Islands. But then came the internet bubble, and he turned his attention there.
During the financial storm of 2008, however, the highly leveraged currency and derivatives bets put on by Vik and Said went against them—big-time. At one low point Vik’s wife took him to Greenwich Hospital, where he was given anxiety medication. DB and Morgan Stanley issued margin calls on Sebastian Holdings. Court documents show that Vik was able to meet $500 million worth from Deutsche Bank, but the cash in Sebastian’s Deutsche Bank accounts were drained with $244 million still owed to DB.
(This story appears in the 04 April, 2014 issue of Forbes India. To visit our Archives, click here.)