Rex Sinquefield

In 1981, Sinquefield and another University of Chicago teaching assistant, David Booth, co-founded Dimensional Fund Advisors, the first passive fund focused on small (microcap) companies customarily ignored in large institutional portfolios. As of June 30, 2018, it managed more than $582 billion in assets.[12][5]

Dimensional Fund Advisors' investment strategy has been said to create an optimal portfolio consisting of various funds that emulate different style and size attributes of various securities markets worldwide, so that one fund might behave like the S&P 500, another might correlate with just the value stocks in the S&P 500, while a third might emulate the performance of all small-cap stocks. Sinquefield is a proponent of passive investment, meaning that he believes you simply cannot beat the market.

Passive investing, Sinquefield has said, generally refers to the idea that you are going to get market rates of return from whatever category you're investing in. If you are invested in stocks, you will do no better or worse than the market over time. If you limit yourself to, say, small-cap stocks, then your return, over time, will be no better or worse than the returns on the aggregate of small stocks. We believe that you're not going to be able to do much better than that because the market doesn't misvalue securities. The prices are right. If you believe in active management, you're saying that there are people who can make valuation judgments that are superior to the market.[10]

In 2005, he retired from DFA because he was “bored” and returned to St. Louis, where he became involved in politics and philanthropy.[3]

On his return to St. Louis, Sinquefield co-founded the Show-Me Institute with R. Crosby Kemper III, a Kansas City banker. Based in Clayton, Show-Me is a think tank that commissions studies on public-policy issues.[5] It has been labeled libertarian,[13][14][15] conservative,[16][17] and free-market.[18] He is president of the institute, whose motto is “Advancing liberty with responsibility by promoting market solutions for Missouri public policy.”[3]

Show-Me has successfully lobbied for a cable franchise reform bill and HB 818, which made Missouri the first state to let employers contribute pretax dollars to employees' health-savings accounts. Show-Me has also opposed governments' use of eminent domain.[5]

Sinquefield became a major financial contributor to political campaigns of both political parties in Missouri politics after the Missouri legislature ended campaign finance limits in 2009.[19] According to a 2015 Governing Magazine article, "big majorities" in both houses of the Missouri legislature have received campaign contributions from Sinquefield.[20] He has particularly focused on altering public education, tax reform, and accountability in government.[21]

In 2014 and 2015, he donated $1 million to Republican Bev Randles' 2016 campaign for Lieutenant Governor of Missouri[22] and three quarters of a million to Kurt Schaefer, a Republican candidate for Attorney General.[23] Sinquefield has also donated to Missouri candidates Shane Schoeller, Chris Koster, and Sarah Steelman, as well as to the 2016 gubernatorial campaign of Catherine Hanaway.[3][24]

In 2014, he supported a ballot initiative to abolish teacher tenure in Missouri[3] and he is a major funder of other groups and PACs, such as Pelopidas, LLC.[25]

Many of Sinquefield's efforts in recent years have been focused on changing tax policy in Missouri. He advocates eliminating the state's income tax and replacing it with a more comprehensive sales tax.[11] Sinquefield advocates replacing Missouri's and Kansas' income tax with a state sales tax[20] on things like childcare, restaurants, and hotels.[4]

Sinquefield also gave money to the group Kansans for No Income Tax which helped governor Sam Brownback lower the state income tax in 2012.[3] Dubbed the Kansas experiment, this policy decreased state revenues by hundreds of millions of dollars[26]; caused spending on roads, bridges, and education to be slashed;[27][28] and failed to lift Kansas' below-average economic growth.[29] In 2017, the Republican-controlled Legislature of Kansas voted to roll back the cuts and overrode Brownback's veto.[30]

Sinquefield also has repeatedly backed measures to repeal the earnings taxes of St. Louis and Kansas City, Missouri.[31]

He is the primary financial supporter of the Let Voters Decide committee.[32] In 2010, the committee placed a statewide initiative on the Missouri ballot. Called Proposition A, it would prevent all Missouri communities except Kansas City and St. Louis from imposing earnings taxes. It would also allow Kansas City and St. Louis voters to vote on whether to retain their earnings taxes.[32] Missourians passed proposition A with a large margin – 68.4% YES / 31.6% NO (1,294,911 YES votes to 598,010 NO votes).[33]

On January 5, 2011, Let Voters Decide submitted nine initiative petitions to the Missouri Secretary of State calling for a repeal of the state's income tax – with a top rate of six percent. The petitions also called for a higher sales tax, capped at seven percent, that would be applied to virtually any good or service transaction involving individuals.[32] Sinquefield and Let Voters Decide President Travis Brown say that replacing the income tax with a sales tax would help create jobs, promote economic development and make state revenue collection less volatile.[34] In 2014, Missouri lowered its income tax rate.[35]

Sinquefield supported the successful effort to return local control of the St. Louis Metropolitan Police Department to the City of St. Louis.[36] Since 1861, the police department had been run by a five-person board that included four gubernatorial appointees.[37][37]

Sinquefield donated $300,000 to "A Safer Missouri", a group supporting the campaign for local control.[38] A Safer Missouri endorsed state legislation in favor of local control,[39] along with a ballot initiative filed with the Missouri Secretary of State, which will be pursued if the legislative efforts fail, according to a spokeswoman for A Safer Missouri.[40] The ballot initiative was filed and entitled Proposition A.[39]

Local control, the Proposition A ballot initiative, received broad support,[41] including St. Louis Mayor Francis Slay,[39] and the Missouri Democratic Party[42][43] On February 22, 2011, the House of Representatives passed House Bill 71, the local measure in that body, by a vote of 109–46.[43] The bill went on the Senate,Senate Bill 23, which failed. Thus the ballot initiative was filed and on November 6, 2012 Proposition A passed with 63.9% to 36.1%.[44]

In 2007, Rex Sinquefield opened the Chess Club and Scholastic Center of Saint Louis, a non-profit organization. An educational organization, its mission is to "maintain a formal program of instruction to teach the game of chess and to promote and support its educational program through community outreach and local and national partnerships to increase the awareness of the educational value of chess."[49] In August 2010, Sinquefield provided seed funding to move the World Chess Hall of Fame to St. Louis, citing the Chess Club's presence and reputation.[50] The Sinquefield Cup is named after him.

In 2016, BBC News reported that Sinquefield, who likes chess “so much he's put tens of millions of dollars into the game,” turned St. Louis into a chess capital because he believes that chess can transform children and their academic lives.[7]

Sinquefield is a director of St. Vincent Home for Children in St. Louis, and a life trustee of DePaul University. He serves on the boards of Saint Louis University, the St. Louis Symphony, the St. Louis Art Museum, the Missouri Botanical Garden,[51] the Contemporary Art Museum St. Louis[52], and the Chess Club and Scholastic Center of Saint Louis.[53] He advises the Archdiocese of San Diego on finance.[5]

With Yale School of Management professor Roger G. Ibbotson, he co-wrote the 1989 book Stocks, Bonds, Bills and Inflation, a study of stock market returns.[54]