Donald R. Van Deventer, Ph.D.

Don founded Kamakura Corporation in April 1990 and currently serves as its chairman and chief executive officer where he focuses on enterprise wide risk management and modern credit risk technology. His primary financial consulting and research interests involve the practical application of leading edge financial theory to solve critical financial risk management problems. Don was elected to the 50 member RISK Magazine Hall of Fame in 2002 for his work at Kamakura.

Read More


An Appreciation: Sebastián Piñera, President-Elect of Chile

01/19/2010 01:56 AM

Over the three day Martin Luther King holiday in the USA, another event took place in Santiago that brought a smile to my face.  This blog is an appreciation of one of my favorite people, Sebastián Piñera, newly elected President of Chile.

Thirty-seven years ago, 40 of us assembled in a classroom on our first day as graduate students in economics and business economics at Harvard University.  Over the next few years, many people well known to the readers of this blog would be on campus: Larry Summers, who would arrive the next year, undergraduates Lloyd Blankfein and Ben Bernanke, and Harvard Business School students George W. Bush (“a good guy to invite to a party,” said a close friend of us both), and Rick Wagoner, recently deposed CEO of General Motors. Perhaps the most interesting of my classmates isn’t a household name here, but the Financial Times tells his story in this link


and Bloomberg adds a nice piece here:


Sebastián Piñera was a new graduate student in economic with the rest of us.  He was charming, completely bilingual, incredibly smart, and very hardworking. In a roomful of very bright people, he was probably the person most sought after as a friend and as a co-author on a research piece.  He was modest and sincere, two traits rarely used to describe Larry Summers, who was to join the economics Ph.D. program the next year.  Sebastián’s career path diverged even further from Larry Summers in the years to follow.
Here’s how Wikipedia tells his story:

Sebastián Piñera
Miguel Juan Sebastián Piñera Echenique (Spanish pronunciation;  born December 1, 1949) is the current President-elect of Chile. He was the winner of the second round of the presidential election that took place on Sunday, January 17, 2010, and will assume the presidency on Thursday March 11, 2010. He is a well known economist, investor, politician and former Senator. He is a member of the center-right National Renewal (RN) party, a constituent of the Coalition for Change, ex-Alliance for Chile coalition.

Personal life
Piñera was born in Santiago to Magdalena Echenique Rozas and José Piñera Carvallo, an engineer who worked for CORFO and was Chile’s ambassador to Belgium and to the United Nations. He is the fourth child, with three brothers and two sisters: Guadalupe, José Piñera (a former Minister of Labour under Augusto Pinochet), Pablo, Sebastián, Miguel Piñera (a well-known Chilean performer), and Magdalena. He is married to Cecilia Morel Montes and has four children: Magdalena, Cecilia, Sebastián and Cristóbal.


One year after his birth, the Piñera Echenique family moved abroad to Belgium and later to New York City, due to his father’s work as the Chilean Ambassador to the United Nations. He returned to Chile and enrolled in The Divine Word School (Colegio del Verbo Divino) in 1955, graduating in 1967.

Piñera later enrolled in the Pontifical Catholic University of Chile for his undergraduate degree in Economics, graduating in 1971. Upon his graduation, he was awarded the Raúl Iver Oxley Prize, which is given to the overall best student of each generation. He also graduated holding one of the highest grade point averages in the university’s history.

Piñera continued on to Harvard University on a partial Fulbright Program for his postgraduate studies in Economics. During his time at Harvard, he and a classmate co-authored an article titled “The Old South’s Stake in the Inter-Regional Movement of Slaves” for the Journal of Economic History.  He also worked as a teaching fellow during the years of 1975 and 1976. After three years at Harvard, he graduated with both a Master and Doctorate degrees in economics. His thesis was titled, “The Economics of Education in Developing Countries.”  He returned to his country in 1976.

Teaching career
Once graduated, Piñera was an educator from 1971 until 1988. He was Professor of Economy at University of Chile, Pontifical Catholic University of Chile and Adolfo Ibáñez University. In 1971 he was professor of Economic Political Theory in the School of Economics at University of Chile. In 1972 he was a professor at the Valparaiso Business School.

Piñera owns 100% of Chilevisión, a terrestrial television channel broadcasting nationwide; 27% of LAN Airlines (LAN), 13% of Colo-Colo, a football (soccer) club; and holds significant stock positions in companies such as Quiñenco, Enersis, and Soquimich.

Piñera is a self-made billionaire with an estimated fortune of US$1 billion as of March 2009 according to Forbes magazine.  His wealth is attributed in great part to his involvement in the introduction of credit cards to Chile in the late 1970s and his subsequent investments, mainly in LAN Airlines stock. Piñera acquired shares of the formerly state-owned company from Scandinavian Airlines in 1994, as part of a joint venture with the Cueto family.

In 1982 an arrest warrant was issued against Piñera. He was accused of violating the Banking Law during his time as general manager of the Bank of Talca. Piñera spent 24 days in hiding, while his lawyers appealed the order. A writ of habeas corpus was first rejected by the Appeals Court, but then approved by the Supreme Court, acquitting Piñera.

In July 2007 Piñera was fined approximately US$680,000 by Chile’s securities regulator (SVS) for not withdrawing a purchase order after he received privileged information (an infraction very similar to insider trading) of LAN Airlines stock in mid-2006. Piñera denied any wrongdoing, and argued that the whole process was part of a political attack to damage his image. He did not appeal arguing that the court process could take years and interfere with his intention to run again for president in late 2009. Later that month he resigned from the boards of LAN and Quintec.

Political career

Piñera has stated he voted No in the 1988 plebiscite against Augusto Pinochet. In 1989 he headed the presidential campaign of Hernán Büchi, a former finance minister of the Pinochet government. During the same election process, Piñera was elected as Senator for East Santiago (1990–1998) and soon after, joined the center-right National Renewal (RN) party. During his term as Senator he was a member of the Senate Finance Committee.

In 1992 Piñera’s attempt to become his party’s candidate for the following year’s presidential election would end dramatically after he was involved in a scandal known as Piñeragate, wherein a wiretapped conversation between himself and a friend was revealed during a political television show he attended. In the conversation—made public by the television station’s owner, Ricardo Claro—he conspired to have his rival for the party’s nomination, Evelyn Matthei, cornered during the show by a journalist close to Piñera. The tape was then revealed to have been illegally recorded by a member of the military and given to Matthei, who then gave it to Claro. Matthei stepped down from the presidential race as well.

Piñera was president of his party from 2001 to 2004. He tried to run for senator in 2001, but resigned his campaign after the presidential candidate of his alliance -and member of the allied party, the Independent Democrat Union (UDI)-, Joaquín Lavín made it clear he would not support candidates from Piñera’s party, insisting on supporting retired Admiral Jorge Arancibia instead.

On May 14, 2005, in a surprise move Piñera announced his candidacy for the 2005 presidential election (RN was supposed to support UDI’s Lavín.) He has described his political philosophy as Christian humanism. After his election, he has become the first billionaire to hold office as President of Chile.  In the first round of the election, on December 11, he obtained 25.4% of the vote, which placed him in second place. Since no candidate achieved an absolute majority, a runoff election was held on January 15, 2006, between himself and Michelle Bachelet of the governing coalition. Bachelet won the presidency with over 53% of the vote.

Presidential elections 2009-2010

Piñera ran for president of Chile in the 2009-2010 election. Since August of 2009, he led in opinion polls, competing with Eduardo Frei Ruiz-Tagle, Marco Enríquez-Ominami and Jorge Arrate; all of whom are left-of-center candidates. In the election of December 13, 2009, Piñera placed first in the results by obtaining 44.05% of the votes, while Frei placed second by obtaining 29.6% of the votes. Since neither candidate received more than half of the total votes, Chileans returned to the polls for a final run-off election on Sunday, January 17, 2010.

On January 18, 2010, the third and final preliminary results were announced by the Deputy Interior Ministry at (02:00 GMT),[citation needed]. These showing accounted for 99.77% of the total ballot boxes. Of the votes, Piñera received 51.61% and Frei received 48.39%.  Eduardo Frei conceded after the first preliminary results, at 21:44 p.m. GMT,[citation needed] making Sebastián Piñera the new President-elect of Chile. Further preliminary results will be made available by the Electoral Service on January 25, 2010. Official and final results sanctioned by the Election Qualifying Court will be published on the Official Gazette on February 1, 2010.

Piñera’s campaign included items such as a campaign anthem and “Thank You” banners.  Piñera’s banners and billboards have carried statements throughout the country such as “Delinquents, your party is over,” and “Small businesses, Big opportunities”.  Amongst his promises are increasing education rates and improving international relations with the neighboring country of Peru.

Piñera’s victory means a shift towards the center-right,breaking the two decade hold by center-leftists politics and becoming the first right-wing leader in 52 years.

Sebastián was such a nice guy to have as a classmate that none of us would have predicted that he had the toughness and drive to win the Presidency.  “Nice guy,” for example, is not often a term used to describe Larry Summers.  I know nothing about Chilean politics or Sebastian’s business career. I do know that he is a wonderful human being and the citizens of Chile are very lucky to have someone so talented as the leader of their country.  Well done, Sebastián.  Well done, Chile.

Donald R. van Deventer
Kamakura Corporation
Honolulu, January 19, 2010


Donald R. Van Deventer, Ph.D.

Don founded Kamakura Corporation in April 1990 and currently serves as its chairman and chief executive officer where he focuses on enterprise wide risk management and modern credit risk technology. His primary financial consulting and research interests involve the practical application of leading edge financial theory to solve critical financial risk management problems. Don was elected to the 50 member RISK Magazine Hall of Fame in 2002 for his work at Kamakura.

Read More