Andy Beal, America’s richest banker, makes a massive bond bet on inflation

 While some regional bank chiefs mismanaged rising rates, billionaire Andy Beal patiently waited years for yields to rise before buying Treasury inflation-protected securities like crazy.

As the Federal Reserve was about to embark on a rapid series of big rate hikes to fight inflation, the sole owner and chief of Beal Bank, based in Plano, Texas, started buying. 

Beal bought Treasury inflation-protected securities, mostly with durations of up to three years. He bought a lot of them. 

By the end of 2022, Beal Bank’s assets had more than quadrupled to $32.6 billion. The asset rise made Beal Bank the nation’s 61st biggest bank. 

Beal has essentially made a massive bet on inflation, buying $21.2 billion of Treasury bonds, Beal Bank’s filings with the Federal Deposit Insurance Corporation show. Just about all of those bonds are TIPS, says a person familiar with the trade who was not authorized to speak publicly. 

In the years leading up to the 2008 financial crisis, Beal virtually shut down his bank amid the ill-fated lending boom, putting him in a strong financial position to swoop-in after the crash to buy up distressed assets on the cheap. He made a fortune.

Beal also publicly backed and financially supported the presidential campaigns of Donald Trump, his longtime friend.

MarketWatch 19 April 2023

https://www.marketwatch.com/story/andy-beal-americas-richest-banker-makes-a-massive-bond-bet-on-inflation-f524dc1e


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