The Billionaire Next Door
When John Calamos took his mutual-fund company public in 2004, not only did he join the ranks of the world's richest people; he also invited the kind of scrutiny and criticism he had never faced as a private businessman
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Calamos says his fascination with finance goes back to his teenage years, when he discovered a cache of old stock certificates in the family's grocery stockroom. He looked into their value and found they were worthless. "I thought I was going to discover three shares of IBM," he says.
Nevertheless, his appetite grew for researching investments. While in college a few years later, Calamos talked his mother into staking him $5,000 to set up a portfolio of five stocks-each issue backed by a $1,000 investment. "I picked four good ones, including Texas Instruments," Calamos recalls. "I also took one piece of advice [about a stock] from a cousin and that went to zero." (His Texas Instruments buy tripled in value while the cousin's choice of Muntz TV went bust in 1959.)
In the early 1960s, Calamos did undergraduate work in economics at the Illinois Institute of Technology, where he also took air force ROTC training. He eventually got an MBA from IIT, paying for his education with income from owning and operating a string of launderettes. In 1965, already married and a father, Calamos entered the air force and soon after began pilot training. He had five years of active duty, with a tour in Vietnam between 1968 and 1969. The military experience changed his life, he says. "Getting my wings gave me a lot of confidence. Being a combat pilot and getting through a war is no pleasant experience. But you make life-and-death decisions that you have to live by the rest of your life. Those were confidence builders and gave me a sense that I could do what I choose."
Throughout his air force years, Calamos had continued to study books on finance and investing strategies. In 1977, he flexed his confidence and started his own company, taking out a $60,000 second mortgage on his house to help bankroll the endeavor. At the time, his focal point was marketing to institutional investors a financial instrument-obscure at the time-known as convertible bonds (which are corporate bonds that can be converted to company stock). One of his early employees was his older brother, Angelo, who retired from the company last year.
The firm began hitting its stride over the next decade. In 1985, it offered its first mutual fund to the public-one of nearly a dozen funds to come. The assets under management skyrocketed, zooming from around $9 billion in 2001 to today's estimated $43 billion. Though the company now employs around 400 people, family still plays a major role in running things: his son John Jr., 43, is a senior-level executive and stock analyst, while his nephew Nick Calamos, 45, is senior executive vice president and head of investments.
John Calamos remains the face of the company, seen on CNBC, Bloomberg Television, and other broadcast outlets and quoted in the financial press. Often he is interviewed via satellite from an in-house studio located within the high-tech Calamos headquarters.
Around Naperville, he's known as a savvy businessman who is a driving force behind the construction of CityGate Centre, an office-retail-hotel complex on Naperville's north side, just across from Calamos company headquarters. (A company-related real-estate group is building the project.) "You see him out at dinner and he's very quiet and unassuming," says longtime Naperville mayor A. George Pradel. "But he's a brain." (Indeed, Calamos was smart enough to get Naperville to agree to rebate up to $7.5 million in taxes that his new CityGate Centre development is expected to generate over the next 20 years.)
A resident of Aurora, John Calamos still loves to go up in the wild blue yonder. He owns three small planes, including a Marchetti SF.260 and a T-6 that he pilots for recreation, and a Citation X business jet that he does not fly, according to the company. On the ground, he has been a supporter of the area's Greek community, contributing $2 million toward construction of the new Hellenic Museum and Cultural Center in Greektown.
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For all the criticism that has been leveled at Calamos and his company in the last year or so, he insists he still enjoys what he does-enough so that he scoffs at the occasional speculation that Calamos could be acquired by a major financial services company. "I have a report in my desk telling me I'd be out of business because of consolidation. It's dated 1992," Calamos says, vowing to stay independent. "I may be too old to work for anyone else."
And, after all, running a mutual fund company-even one going through a tough transition-sure beats stocking grocery shelves.
Editor's note: Contributing editor Robert Reed is an investor in the Calamos Growth Fund, which he holds in a 401(k) investment portfolio.
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