S. Donald Sussman

Class of 2023

  • Founder and Chairman Paloma Partners

Have confidence in your instincts and be persistent in your efforts.

In 1946, when his mother was close to giving birth to him, Donald Sussman’s grandfather insisted she take a train to New York City from their home in Florida because he felt the healthcare was better up north. “Technically I was born in New York, but I was totally raised in Miami Beach,” says Sussman. “In my youth, Miami was just a small beach town. I think there were only three buildings taller than three stories. I have fond memories of my father taking me to ride the elevator in a new building that had 14 stories. On weekends, our friends and neighbors would go to the 48th Street beach, which is now a parking lot. Miami is a completely different city today.”

Donald’s father wanted to be a math professor. He was a graduate of Columbia University, and received graduate degrees from MIT. During World War II, he served the Army designing electrical systems for the Mustang fighter jet from Tampa. After the war, Donald’s grandfather persuaded him to move to Miami. He worked as an architect and general contractor in real estate development. “Many of the art-deco buildings that are now treasured in Miami Beach were built by my father,” says Sussman. “My mother was involved in buying furniture from wholesalers to put into the apartment rentals they owned. She was mostly a homemaker, but she did what she could to help my father.”

Education was strongly encouraged in the Sussman household. “As a boy, if I showed interest in a new toy or a book, I always got the book but not the toy. I was a good student, and in our home that was encouraged. At the age of 12, Sussman, after overhearing his grandfather, began following the stock market. He told his grandfather he wanted to invest his $300 savings in Michigan Sugar. “I picked this stock because Miami was abuzz with the news that soon there would be a revolution in Cuba. My grandfather did the transaction for me, and I increased my money sixfold. That was my first venture into high finance.” When Sussman was 14, it was finally decided he could attend a boarding school in Lennox, Massachusetts. “It was a fantastic school,” he says. “It was coed and multiracial. We had a very interesting mix of students, including kids from Nairobi, the Bronx, Detroit, and Chicago. I loved it and was doing well.”

Unfortunately, the spring of his first year away at school, Sussman’s father died suddenly. He had been a victim of rheumatic fever as a boy and it had damaged his heart. For the last two years of his life, his heart was dangerously enlarged. He knew he didn’t have long to live, but he kept this from his wife and son.

“My mother and I were completely devastated by my father’s passing,” says Sussman. “She literally couldn’t cope. My older sister was away at college and my mother was lonely, so I decided to stay in Miami and go to the local high school. But shortly after school started, I realized this was a mistake. I told my mother that having experienced what a real education is like, I couldn’t go back to this much lesser experience. She agreed and I returned to Lennox.”

Sussman continued to mourn his father. Emotionally, his mother was unable to meet with lawyers to settle her husband’s affairs, which left Sussman at the age of 16 struggling to deal with it all. “I was sitting in meetings with lawyers trying to understand what they were saying about my father’s properties, some of which were in the middle of development. We had to negotiate sales, and in the end, despite my advice, I think my mother’s attorneys took advantage of her.”

When it came time for Sussman to decide where he would go to college, he was accepted to MIT, but felt more comfortable going to his father’s alma mater, Columbia. “At this point, I was trying to move forward, trying to do things appropriate for my age and circumstances, but I sorely felt the loss of my father and his guidance. He was always so sure of what was the right thing. The year before he died, he took us on a family vacation to see his roommate from MIT in Budapest. While there, we twice went behind the Iron Curtain. We had to have special permits and guides to do this, but my father thought it was important that I see what it was like to live and work under communism. He wanted me to see the failure of it in comparison to capitalism. It was a lesson I never forgot.”

Sussman’s plan was to follow in his sister’s footsteps and become a doctor, but a summer internship in a Texas medical examiner’s office convinced him to change path. He returned to Miami and worked for a small brokerage firm as a clerk typist. He caught the eye of the company’s president, who offered him a full-time job as his assistant. Columbia had a rule about students not working full time, but Sussman was given permission to pursue this opportunity. At the age of 19, he was working on the firm’s proprietary trading transactions—something few people understood in the 1960s. When a client offered Sussman a full-time job, he decided to leave Columbia to pursue the world of arbitrage investing.

Eventually, Sussman returned to education. He earned his bachelor’s degree and an MBA with a focus on statistics from New York University at night while working for investment firms.

In 1981, at the age of 35, Sussman decided he was tired of making money for his employers, but not receiving what he felt was fair compensation for his actions. He founded the hedge fund Paloma Partners with one other employee, a desk, and two chairs. It was the dawn of the computer revolution, and Sussman became a pioneer in applying quantitative techniques to investing. Sussman also focused on operational innovations. In 2006, JPMorgan Worldwide Securities Services acquired the middle- and back-office operations of Paloma. In 2013, Sussman was named to the Institutional Investor-Alpha Hedge Fund Hall of Fame.

Sussman has served on the boards of Carnegie Hall, the Center for American Progress, EMILY’s LIST, Skidmore College, MIT, University of the Virgin Islands, and the Portland Museum of Art. He is also an avid philanthropist. His giving largely focuses on education, the arts, democracy protection, affordable housing, and improving health. “When I am trying to help an individual or a community, I feel I am serving as a bridge to the next chapter of their lives. It’s very rewarding for me.”

If Sussman is asked to define success, he says, “It’s knowing you have the ability to help others.” He also takes great pride in his two daughters and all they have accomplished and delights in spending time with his six grandchildren. “I have been guided my whole life by my parents’ values,” he says, “and I hope I have been able to do the same for my family.”

Losing his father at the age of 15 was, Sussman says, the biggest adversity he faced in his life. “That tragedy taught me that when you hit a speed bump in life, you just have to persevere through it. That is something I would share with the Horatio Alger Scholars. Hard work and persistence will eventually get you where you want to go.”

Honored by his Horatio Alger Award, Sussman says, “I have lived the American Dream, which for me is achieving enough to make my family secure and being in a position to help others in my community. I am excited to join this organization, which promotes the opportunities that abound in this country, and I will do all I can to help it move forward in its mission.”