Ira Lubert on Iconic Investments, Penn State Legacy & Contrarian Wisdom

In this episode of Uncorked: Wine, Business & Life, Bill Green and Jerrold Colton welcome legendary investor Ira Lubert to the Saddlehill Winery Tasting Room. Known as one of Philadelphia’s most iconic investors, Ira shares the incredible journey from winning a New Jersey state wrestling championship to becoming a contrarian investor who has raised over $17 billion and built a reputation for protecting the downside. He reflects on his deep ties to Penn State as an athlete, board chairman, and philanthropist, including his role in elevating the wrestling program to national dominance. From his early entrepreneurial days buying mobile homes to spearheading landmark investments like the Valley Forge Casino, Ira offers invaluable lessons on timing, luck, discipline, and daring to fail. A rare, candid conversation with a true heavyweight in business and life.

Introduction to Ira Lubert

Hi and welcome to Uncorked Wine, Business and Life with Bill Green. I’m Gerald Cohen, co-host, and we have an amazing guest here today. Bill, from the time we talked about doing this podcast, this was one of the first ones you suggested. You couldn’t wait till he got here, and here he is.

Ira Lubert was at the very top of the list. He is one of my newer friends, about 12 or 13 years. Ira is known as one of the most successful and iconic investors, not only in Philadelphia, but in the United States. We’d shaken hands years ago, but when a formal meeting was set up by Sid or Richard Vague, I gotta tell you, I don’t get nervous very often.

You have a pretty palatial office overlooking Philadelphia, and I was pretty intimidated. Within five seconds, you softened the beaches and it was like I was with Uncle Ira. One of the things that came out of that first meeting was he said, "Wow, you’re an operator, so let’s make a deal. Let’s do some stuff together."

I told him, "Ira, you have to teach me how to be a good investor." I don’t want to know where the scorecard is on that, but thank you so much for being on Uncorked. It’s just been an amazing bunch of years working together.

It’s certainly our pleasure. It's hard to know exactly where to start the Ira Lubert story, but a good place is heading into Penn State in the late 60s. That was a very different time, over 50 years ago.

Early Life and Wrestling Success

I don’t tell this story often. It was 1968, and I graduated from Newton, New Jersey High School. I was very fortunate; I won a New Jersey state wrestling championship my senior year. For those who don't appreciate how incredible an accomplishment that is, it's one person in each weight class. The pressure to win the districts and the regions and the state had to be an incredible accomplishment for a high school kid.

It really was. When you layer on top of that, I played basketball. At 260 pounds and 6 feet tall, I could jump about 4 inches off the ground. My sophomore year of high school, they had terminated the high school wrestling coach and football coach.

Two recent graduates from the University of Maryland, Gary Wikander and Dick Gaddy, were hired. One was hired as the head football coach and one as the assistant. When I showed up for my weigh-in and physical for football my sophomore year, they told me I couldn't play basketball, that I had to wrestle.

If you said that today, there would probably be a lawsuit. But back then, I went to the athletic director, Art Dieck. It’s funny how you remember these names after 60 years. He just said, "You ought to wrestle."

They taught me to wrestle. I wrestled my sophomore, junior, and senior year and won the states my senior year. I was a team sport player, and it was a big transition to an individual sport. Then I was fortunate to get a full scholarship to Penn State.

I was rejected twice to Penn State before they finally accepted me. I didn’t have the greatest grades and I wasn’t that serious about school. But from my hometown, I worked on Rich Lorenzo’s farm. They bulked me up. He was a wrestler at Penn State, so he taught me.

When I graduated from high school, he graduated from college and became the assistant wrestling coach. They made an exception and I had to go for the summer term. Later I was able to negotiate out of that to the fall term. To this day, Rich Lorenzo is my best friend. He’s 79 years old today and we see each other all the time.

I think State College is the greatest place on earth. I’m presently building the last casino that will ever get built in Pennsylvania in State College. It’s under construction, so I really love it up there. It’s a great environment for people to be exposed to.

Leadership and Board Service at Penn State

Not only is Ira an amazing investor, he also donates his time and money to philanthropy. He was chairman of Penn State during a really rough period. For 17 years, he was on that board and led that school while managing hundreds of other investments.

I spent 17 years on the Penn State board and I'm very proud of that. I’ve given my time and my treasure to the school. When I was a wrestler at Penn State, I got beat out by one of my other best friends, Dr. David Joyner.

We were both heavyweights. He finished second in the Nationals one year and played football as an All-American under Paterno. He’d come out for wrestling after football. The first few times, I would beat him by one point. After that, he’d get in better shape. When we tried out for the Nationals every year, he beat me by one point.

In other schools, they only had three scholarships per year for wrestlers. I got one my freshman year, and when I didn’t make the team my sophomore year, I thought they were going to take my scholarship. They never did. I never forgot that Penn State was very loyal to me, and I made a promise I’d be very loyal to them.

I lived through the Sandusky scenario. They asked me to be the chair of the board during that rough time. Before that, I headed up the legal committee and I had to help negotiate 27 of the 36 child molestation cases. They wanted the businessman to sit with the lawyers.

I went to my two partners at my private equity and real estate funds and asked for their permission to pretty much take a year off to become the chairman. I won’t get into all the things we went through, but it was a dark time. I do believe Penn State came out much stronger, much better, and the franchise is in great position today.

It is unbelievable how quickly they came out of it under your leadership. I want to get to the start of your business career and your entrepreneurial skills, which were developed at a really early time in conjunction with your Penn State history.

The Mobile Home Venture

I went to Penn State in 1968. You read a book called Outliers, and it says that timing and luck play a big role in your life. I have a saying that there’s a thousand plumbers someplace in the world that could have been me. They just didn’t have the luck and good fortune that I had.

I see a lot of people who are very successful and they believe it’s because of their genius and work ethic. All those things are true, but you also have to have timing and luck to reach certain milestones. I happened to go to Penn State when they oversold the campus by 1,800 students.

There were kids sleeping out on Old Main lawn and the president went on TV and asked local residents to take people in. Over time, as people dropped out or transferred, it worked itself out. But that gave me my very first business idea.

Back in the 60s and 70s, guys and girls would go to school, meet, and end up getting married over the summer. Parents couldn’t afford a two-bedroom apartment in a major university town, so they would help newlyweds by buying a mobile home. It was a lot less money.

I did some initial due diligence and found out that everyone graduating in the spring and going to work for IBM or Willmar Industries or NFI was selling. There were 60 or 80 mobile homes for sale. I would wait for the last two weeks of the semester and buy them at 20 or 25 cents on a dollar.

I put athletes in them over the summer just to cover my costs. The bottle gas, electric, and land rent totaled about 60 or 70 dollars a month. The athletes would pay me that to live there because many stayed up to work out and get better.

In the fall, when newlyweds were coming on campus, I took the worst mobile homes and sold them. The better ones I kept and rented. My partner was Rich Lorenzo, who did the maintenance. I rented them and collected the rent for five years.

When I graduated and took a job with IBM, I sold that business. I had accumulated 39 mobile homes and used the money to buy my first pieces of real estate, the largest being a 32-unit apartment building. I was a food services management major only because I couldn’t pass an accounting class.

Career Growth at IBM and Safeguard Scientifics

Statistics was really hard to believe. But that was my initial story. From there, you became a sales rep for IBM, and then things pivoted to Safeguard Scientifics. You were something like number one out of 4,700 salespeople for IBM nationwide two years in a row.

IBM had a one-year training program where you would go to Endicott, New York, and then back to the office. IBM was the only name in the industry back then. I was sitting next to graduates from all the Ivies, but the training was practical. They would train you to do real-time selling and hit you with obstacles.

The mental preparation I gained through wrestling really helped me. I graduated number one in my training class and became the rookie of the year in the region. My first full year, I was the president of the 100% club for 4,700 salesmen. I was the first and only one ever to do it twice.

I was recruited away to run a sales organization for an ITT company, but I had young kids, so I eventually left and came back. I went to work for two companies before I found Pete Musser from Safeguard Scientifics. An attorney from Aronimink who I knew sat on the board of an emerging company with me.

He said, "You need to meet Pete Musser." I was in my 30s and I had never heard of him. We had lunch at Aronimink and he hired me that day. I spent nine years there and walked into his office one day and said, "Pete, I want to leave with your blessing. I want to go start a private equity and real estate fund."

I told him I'd never compete against him and we remained best friends. I give more credit to him for helping my career than any other individual. I stayed close to him until he died at 92.

Contrarian Investing and Minority Stakes

Let's move into investing. You consider yourself a contrarian investor. One of the things you've taught me was protecting your downside. When we first started talking about deals, we’d have breakfast in Rittenhouse Square. I had just started Lending One, and you said you wanted to invest.

I said I wasn't really taking on any investors. Then it dawned on me that in business, things aren't always going to be up. This is the guy you want in your foxhole when things go wrong. Having Ira as an investor in Lending One was like an insurance policy. Talk about the type of deals you look at and how you think about protecting your downside.

I am a contrarian. I am generally selling when everyone’s buying and buying when everyone’s selling. I developed a sales strategy that differentiates myself. Most private equity firms and entrepreneurs have a need to control; they need to own 51% or more.

I had a very successful private equity firm called LLR Partners. I recently retired from there after 28 years. They took in money from investors all over the world, and because that fund has to be up in 10 years, they need to control their destiny.

I use that as an advantage. My pitch for 40 years has been this: I walk in to see Bill Green, who is looking for investors. I say, "Bill, I just saw Joe Blow walk out. He’s a brilliant MBA from Wharton and the head guy for Blackstone. Let me guess, he wants to buy a majority of your company."

I say, "Bill, why would you ever want to sell a majority? You’re 57 years old and you’ve done this for 30 years. You’re going to let a 27-year-old MBA tell you how to run your company? I want to invest, but I want a meaningful minority piece, maybe 20 to 40%."

I tell them I can’t pay the same value because the other guy is buying a majority premium. I have to get a minority discount because you’re going to have control. You make every decision. There are just three things you can’t do: you can’t hire your family without my permission, you can't give yourself a raise, and you can't take on major debt.

I tell them, "If you keep 70% and I get 30%, in seven years when you want to play golf, I represent to you that you'll end up making more money than if you had sold 70% today." That pitch doesn’t resonate with everyone, but it resonates with enough people to separate me from the group.

You’re really more like a holding company. You’re very patient capital. Most people start a family office from the proceeds of a successful company. My family office was started from investments and only investments. I didn’t have an operating business like Willmar or Lending One.

My whole career has been about investing in a minority position by design. It’s better for me because I’m not taking on the responsibility of operating those businesses. I only own one company 100%. Everything else, I’m a minority investor. It's over 200 investments currently, so you can't operate those.

In Bill's business, he has all the people responsibility. He’s managing the people in addition to the business. I don’t have the people issues. We did start Mountaineer Homes together as 50/50 partners. There’s not a week that goes by that we’re not on the phone strategizing.

I want the entrepreneur’s success to be my success. I really want to help mentor these people, and I learn a lot from them. What I learned over the years is that when one of my partners goes to a cocktail party, the last thing they want to say is, "I work for Ira Lubert."

They want to say, "I founded the ABC Company, and Ira Lubert is one of my investors." I learned that early. Through their success comes my success. Even in my funds, I was a minority owner by design so I could recruit world-class people. They were co-founders of Lubert-Adler, LLR, or LEM. It was their career, so we never lost anyone.

Fundraising and Back-Office Support

In the funds, your role was obviously the investment committee, but your main thing was raising money. You've raised billions and billions—maybe 17 or 18 billion. When I approach an opportunity, I believe you have to have differentiation.

In 1997, I left Safeguard and started a real estate fund. I was introduced to Dean Adler, and I took Dean out of a company called CMS. I didn't know much about raising money for a fund then, so I formed a holding company called Independence Capital Partners.

The concept was to have a back office integrated for Lubert-Adler and follow-on funds. I went to state pension funds and college endowments. I told them, "You're going to look at 20 funds and pick one or two. I'm going to tell you why you should pick me."

I said, "When you invest with us, you want us to do five things: source a transaction, negotiate it, enhance its value, and monetize it. That’s what you’re paying us fees and promotes to do. But in a normal fund, one of the partners has to spend 40% of their time on investor relations, accounting, tax, and legal."

I told them, "They hate doing it, and they don't do it great. My concept is a co-op where four or five funds pay into it. Ira Lubert never made a nickel off it. I hire the best CFO, HR, and compliance people, and everyone divvies up the cost. Ira is out doing what you're giving me money to do."

That really resonated because it sounded good and they had never heard that pitch. We raised a lot of money very quickly. Eventually, when the funds got so big, we had to move some of those people in-house, but that was the start.

Successes and Learning from Failures

Looking back at your career, what was your favorite investment and which one would you rather forget? My favorite would be the Valley Forge Casino. A lawyer gave me the idea to apply for the license in 2014. I was granted the license and then got sued by another local casino, which took two years.

That casino had inserted a rule that Category 3 designations had to pay a guest fee because they didn't want competition. I didn't realize the significance of that. They sued me saying I shouldn't have been granted the license, but it went to the Pennsylvania Supreme Court and we won.

We built the casino in King of Prussia, an amazing location. We cut the ribbon on my birthday at 12:01 midnight and a million people showed up. But a week later, I learned a lesson. Those people went back to their regular casinos where they had loyalty points, and I was the only one charging $10 to get in.

It took four years to get the law changed in Harrisburg. I had to hire and fire three different CEOs and it was the first time I had to go in and run a business myself. Eventually, I sold it to a New York Stock Exchange gaming business and did very well. I'm proud I stayed by my investors.

The worst was a data center investment in Fairless Hills. I backed an attorney who represented himself as a CEO. I did a terrible job in due diligence. I fell in love with the idea and the person, took shortcuts, and we lost 90% of our money.

I let my investors down and learned a big lesson. To this day, I tell my people we don't go to success dinners. Bankers take you to dinner when you buy a company, but I’ve never attended. I want to learn more from the failures. We focus more attention on the ones we lose than the ones we get.

Management Style and Strengths

You spoke to the graduates of Penn State and told them to "go out there and dare to fail." You said they will fail. I think you learn so much more from failures. It's not a crime or an embarrassment to fail, but when you do, you need to do a self-assessment on why.

I realized what my strengths and weaknesses were. Most people's basic personalities do not change. I'm not a great people person, so I'm not a great manager. I have so much respect for people like Bill who can run a business. It’s hard to do.

I have very little patience. I have a work ethic where I would feel bad if I felt someone wasn't working like I was. I have a very dysfunctional life; I don't play golf. As a result of that assessment, I put together a strategy to avoid my weaknesses.

Even through Lubert-Adler, we indirectly employ over 200,000 people. But for the last 40 years, I've only ever had two people report to me: the guy who runs my family office and my executive assistant. Passing off the people responsibility was the way for me to make 200 investments.

Ira is also unique because he never drinks. For 13 years, I’ve been trying to get him to drink wine with me. We go out for dinner and Ira has Diet Coke or Coke. He even brought his own Pepsi today. Maybe that’s why he’s so functional.

Philanthropy and Giving Back

Sports are a big part of your life too. You’re an avid Eagles and Penn State fan. Adam Taliaferro, who is one of my favorite people, points to you as someone who made a huge difference in his recovery. He said you headed up the fundraising for him when he really needed help.

Adam’s a unique guy. He was the first true freshman ever to start at Penn State football. I was at Ohio State watching him when he got hurt. I met him later, and he's just a great guy.

You’re in your mid-70s and you work harder than people in their 40s. What’s next? I recently retired from my funds. I’m full-time in my family office now, and it’s really more for philanthropic endeavors. Everything I have, other than what has already gone to my family, will go to charity.

It’s all set up to go the day after I die. My goal is that the last check I write bounces. There's no estate tax or anything like that. The plan is to donate it.

The Success of Penn State Wrestling

I have to ask about the wrestling program. You’ve been spearheading a program that is now number one in the country. You’ve got a coach who might be as good as any coach in the world.

My golf game is Penn State wrestling. I’ve given a lot of my time and money, but all the credit goes to Cael Sanderson and his coaching team. I helped recruit him. There was a committee of five, and we weren't in unanimous consent, but I pushed hard.

Penn State would usually hire a coach from within the school and finish in the top eight, but they wouldn't win. I felt we needed to change the culture. We flew to Ames, Iowa, and met Cael in a Holiday Inn room. He had an undefeated career with four national championships and an Olympic gold medal.

I looked into his eyes and asked why he thought Penn State could excel. He said Pennsylvania, New Jersey, and New York are hotbeds for wrestling. He said the school has a great reputation but needed leadership and a fan base. He said, "I think I can bring the leadership."

I fought hard to hire him. Social media said I wrote a check for a million dollars to get him, but that's not true. Money has very little meaning to him. The second year he was there, he won his first national championship. He’s won 12 out of the last 14.

He is regarded as the best college coach in any sport. Last year, he had all 10 wrestlers become All-Americans. He broke the all-time scoring record for points in a tournament held right here in Philadelphia. He has a young team and has produced over 40 individual national champions.

In an individual sport, you can’t hide. If you’re out in front of 18,000 people, it creates real attributes. Being mentally tough is important in whatever you do in life. You need talent, but you also need conditioning and physical toughness. That gives you a good foundation to succeed.

Closing Remarks

This has been amazing. It was untraditional that we weren't able to drink wine, but maybe we can grab lunch and sneak a Shirley Temple in at the end. I don't need to drink to have fun; I'm very functional without it.

The traditional toasting of the wine glass is now a toasting of Coke and Diet Pepsi. To Penn State, and looking forward to a great football season. On behalf of Bill Green, I’m Gerald Cohen, thanking Ira Lubert for joining us. We’ll talk to you next time on Uncorked.