The Rise and Fall of the House of Braun
How financial success — and eventual collapse — changed a family forever
I n 1973, the Organization of Arab Petroleum Exporting Countries placed an embargo on United States oil imports as retaliation for the country’s support of the Israeli military during the Arab-Israeli War. The embargo led to a fuel shortage in the United States and in turn, a reduction in mail delivery from the United States Postal Office. It also led a shaggy-haired fourteen-year-old boy in San Francisco to come up with his very first business.
The boy, who is also my father, had an idea: The post office wasn’t delivering mail on Saturdays to residences or businesses — it was only going to the Rincon Annex Post Office, located about half a mile from his father’s office downtown. My grandpa brought him along as he picked up documents and packages that couldn’t wait until Monday morning. “I figured, well, if my father needs his mail, maybe some of the other tenants of his building need their mail, too,” he said. He typed up some flyers on his electric typewriter: “Hi. My name is Aaron Braun. I’m offering to pick up your mail for you every Saturday for five dollars a month.” He put one under every door on all thirty-one floors of the building. He ended up only getting three clients — an insurance company, a one-man law firm, and a travel agency. But still, it was an extra fifteen dollars a month for tagging along on the same errands he would be doing anyway with his dad.
My father was a precocious, scrawny teenager who loved skateboarding, Chinese food, and Bad Company. He had a narrow face and deep-set, brown eyes. He was more independent than most of his peers; he taught his best friend Andy how to navigate the city’s bus system. He grew up around lots of San Francisco old money types, though he was not one himself. His father, both a workaholic and a high-functioning alcoholic, started a successful law firm called Farella Braun and Martel. His mother, a German-born Jew who fled the country at the onset of Nazi occupation, was a librarian. Their family was not struggling by any means, but they led a more modest, middle-class lifestyle than the families that my father and his two siblings met through the San Francisco private school world.
I’ve always loved hearing stories about my dad when he was young. I thought that if I looked close enough, I could see the bright, boyish face hidden beneath the mask of a perpetually tired man. Today, he is sixty-four years old; his eyes are frequently bloodshot, not from alcohol but from lack of sleep, and are decorated by a halo of crow’s feet. He used to get up early so that he was ready to go when the stock market opened in New York; now that he’s barred from running an investment firm in California, he still doesn’t sleep much. No longer scrawny, he stands at the same height that he did at the age of fourteen: five-foot-seven. He has a nice, tan complexion built up from years of lying in the sun, and a bit of a gut.
My dad loved to work. Beyond the obvious necessity for survival, he liked the purpose of work: he felt most productive when he had structure and was reaching a goal. He began his career in Silicon Valley, doing market research for a company called Dysan (best known for creating the floppy disk). But he had set a loftier goal for himself: he wanted to start his own investment firm within ten years of graduating college. He left Silicon Valley for the world of investment, working as an analyst at various firms throughout the mid-1980s and early 1990s.
On April 1, 1995, Aaron started Willow Creek Capital Partnership, a classic hedge fund. He was thirty-five years old and just missed the ten-year goal that he had set for himself. But he’d been judicious in his preparation, choosing to learn from other investors about picking the right companies to invest in long-term, or to short, where you sell borrowed stock with the expectation that the price will fall. By the time that he had established his own firm, he had been married for ten years to Joan DeHovitz (my mother), had three children (my siblings), and left San Francisco for the quiet, idyllic, and extremely wealthy suburb of Marin County, just across the Golden Gate Bridge.
The fund proved to be successful right away. At its peak, in 2003, Willow Creek had assets under management of $1.3 billion. “The profile of the business far exceeded anything that I ever thought it would get to,” my dad said.
With increasing performance came increasing pressure: to make more money, to keep his wife and children happy, to throw the best parties, to take the nicest vacations, to drive the nicest cars. He stopped looking at price tags because he could.
There’s that old idiom that says, “Money talks, wealth whispers.” If that’s the case, then throughout the early aughts, Aaron Braun was screaming. But in 2009, at the tail end of the Great Recession, he lost his voice altogether.
I n 2001, following the implosion of the Dot-com bubble and the September 11 terrorist attacks, the US economy was in bad shape. To get Americans to spend money again, the Federal Reserve cut interest rates. When interest rates go down, it becomes easier for people to borrow money and make larger purchases that require loans, such as a house or car.
These low interest rates, coupled with federal policies that encouraged people to buy homes, led the country to a record-high home ownership rate of sixty-nine percent in 2004. If you’re wondering how that many people could afford to be homeowners, something that I, as a woman straddling the line of Gen Z and millennial, will likely never be, you’re not alone. It’s — at least in part — because of mortgage-backed securities (MBS). An MBS consists of a bundle of home loans bought by the banks that issued them. The banks then sell the MBSs at a discount to investors. This process essentially turns the bank into an intermediary between the buyer and the investment industry.
With the expansion of the mortgage finance market, people who typically were not eligible for loans previously, such as those with bad credit, were now able to take out loans and buy homes. This group was offered a subprime mortgage; an interest rate associated with this type of mortgage is usually high to compensate lenders for taking the risk that the borrower will default on the loan. By introducing a new group of borrowers into the housing market, demand increased, and home prices began to rise. This was fine as long as home prices kept going up. But in late 2006, in some locales, they began to go down. This caused issues for many Americans who bought their homes at the high point of the market. Their houses became worth less than they bought them for. By 2007, these borrowers began to default on their mortgages in large numbers. Some of the companies holding these subprime mortgages began to go out of business.
What happened next can best be described as a domino effect: the larger financial market could not escape the ramifications of the subprime mortgage crisis, and losses were not constrained to the United States. In October 2007, the Swiss banking giant UBS became the first major bank to announce losses — $3.4 billion — from sub-prime-related investments. The next year, two large American institutions, Bear Stearns and Lehman Brothers, went bankrupt. Lehman Brothers, which was founded in 1850, declared the biggest bankruptcy filing in US history, with a debt of $613 billion. The Lehman bankruptcy forced a massive adjustment to the stock market, which started falling, and continued to fall, until hitting bottom in March 2009.
Willow Creek Capital Management, my father’s hedge fund, used UBS as its “prime broker.” This meant that most of Willow Creek’s securities sat in an account held by UBS, which also loaned money to Willow Creek so that it could trade on margin. When UBS began to be affected by the housing crisis, it was forced to contract some of its activities. Reducing loans to a margin account represented a quick and relatively easy way to lower the bank’s outstanding loan exposure. On February 25, 2009, UBS triggered a margin call to Willow Creek, meaning that it was asking for additional money to keep maintaining the account. To meet the margin call, however, my father had to sell stocks just when the market was approaching its bottom, which it would hit on March 6, 2009. It ended up destroying his business.
My mom first laid eyes on my dad in the hallways of Lowell High School, located in San Francisco’s Sunset District. It was the fall of 1976; she was a sophomore, and he was a senior. “I was walking by the journalism room, and he came out. And I saw him, and I just was mesmerized,” she said. “Whatever he had, whatever charisma, looks, anything, the energy, it was just like … it was magnetic.”
My parents had run in circles adjacent to each other in high school — they were both members of the same synagogue — but they didn’t end up meeting until 1982 at UC Berkeley. It was the spring, and both my parents found themselves in line at the school’s Career Placement Center. My mom was filing her resume when my dad approached her and used the actual phrase, “So, you’re gonna knock ’em dead?” This charming pick-up line led to an hour-long conversation, in which they discussed their shared experiences growing up in San Francisco. Two years later, they were married. My mom was twenty-three years old on her wedding day; my dad was twenty-five.
Joan was born in St. Louis, the youngest of four siblings and the only daughter of Bernard DeHovitz, a doctor, and my grandmother Ruth, a homemaker. In 1969, Bernard and Ruth decided to pick up and move their entire lives to San Francisco, in large part because they were intrigued by the cultural revolution happening out West. Their interests in modern art and psychedelic music were not aligned with their Midwestern lifestyle. My mom spent much of her childhood moving; she went to four different elementary schools in four years. She was always searching for stability, and she quickly found it in Aaron. They were opposites in many ways: he had dark features, was impulsive, adventurous, and fiercely independent. She was blonde with bright green eyes, anxious, and soft-spoken. She prioritized her family over all else. When I was growing up, my mother would often characterize my father as the typical “bad boy” with an earring and a motorcycle; meanwhile, she was a theater nerd. But in reality, she was voted “Most Adorable” in her senior class popularity poll and worked part-time as a model. They both had things going for them.
My parents chose to stay in San Francisco to start their life together, mostly to stay close to my mom’s parents. During their early years of marriage, my mom worked in corporate communications for Bank of America while my dad was working for various investment firms. By 1991, with their first child, Benjamin, they moved to Marin to fulfill their suburban dreams and give Ben a much-needed lawn to run around in. Their second and third children, my sister and brother, were born soon after.
Once she started having kids, going back to work was never a real consideration for my mom. “I knew that I wanted to stay home with my children. My mom had done that, and it was really important to me to spend that time with them because … it was like my dream,” she said. “To have children and to be with them. That’s what I really wanted, and I was extremely grateful I could do that.”
For a long time, my mom managed the family’s finances. In 1995, when my father started Willow Creek, she was in charge. “Aaron was late with bills, so I just took over when we got married. And [I] stayed being in charge of saving money and paying all the bills, including the mortgage,” she said. However, as my dad made more and more money, my mom’s role as financial overseer got outsourced to an assistant.
By January 1999, with their family complete (I was born in 1997), the Brauns moved from a modest, single-story ranch style home to an imposing, two-story brown shingled home in the Kent Woodlands, an exclusive neighborhood nestled in the town of Kentfield. It looked like a gingerbread house come to life. Everything my mom had ever wanted was in that home on 45 Evergreen Drive. She gave her children, as well as herself, all the things she didn’t have: matching furniture, a big backyard, a luxurious suite-style primary bedroom, complete with a walk-in closet that is approximately the size of my current apartment. “Everybody — I mean everybody — said it was the most beautiful house in the Kent Woodlands,” she said. Even today, it’s still a source of pride for her.
My mom spent much of the early 2000s cultivating the life she’d always wanted. My parents threw lots of parties, inviting friends to revel in their fortune, even if these “friends” were judging them as well. “At one party, there was a mother from [my kids’] school who said, ‘Did you ever think Aaron would make this much money?’” But my mom said she was as shocked as anyone. All she ever wanted was as much money as her parents had. Yet once she surpassed that, she made sure people knew it. She wore Cartier around her neck and completed every outfit with one of the several Birkin bags in her rotation. Everything in her life at this point, from her house to her outfits to her cars (a Jaguar convertible and a succession of Cadillac, Range Rover, and Lexus sedans) was intended to paint a perfect picture of a perfect life. “I was an insecure person, and I would buy things to make people like me,” my mom admitted.
She and my father were also generous. They donated large sums of money to charities and the public schools their children attended. They also built my maternal grandparents a guest house on the sprawling eight-and-a-half-acre Napa Valley property they purchased in 2004.
Recently, I asked my mom if she thought in hindsight, the family would have benefitted from a second income when my dad’s hedge fund began to falter. “Had I known then what I knew now, of course it would have been nice to have some sort of a side business. But there was really nothing I was interested in. Nothing I felt like I was really good at except, you know, being a mom. I just did not have a lot of confidence in my abilities to do anything else.”
2009 was a big year. My dad was turning fifty, and my parents were celebrating their twenty-fifth wedding anniversary. To mark the occasions, they were planning a party at our home in Yountville, a small town in Napa Valley best known for its wineries and restaurants, including The French Laundry, which has a three-star Michelin Guide rating and was once called “the best restaurant in the world, period” by Anthony Bourdain. The party was planned for Labor Day weekend.
This was also the year that would change everything, even if my parents didn’t quite know it yet. Late on Tuesday, February 24, UBS notified my dad that Willow Creek had a margin call of about $13 million. Why? Because UBS had updated their “house” margin maintenance rules as they attempted to minimize risk following the huge losses that the bank incurred in 2008. Margin, in this case, is the money borrowed from a broker to purchase an investment. By making the margin call, UBS communicated that they would not be able to provide as much margin as they had previously, and my dad would quickly have to increase his collateral. He would have to come up with $13 million within five days.
At the time of the margin call, the stock market had been declining for eighteen months in the biggest drop since the Great Depression. Both buyers and sellers were not eager to make trades. The stocks that my dad had to sell were largely “illiquid,” meaning that when he sold them, particularly in a market that was itself going down, the value of the stock became pushed down as well. This meant that his portfolio at UBS overall was devalued, triggering yet another margin call.
Robert Whitelaw, a professor of entrepreneurial finance at New York University, defined this as a “death spiral.”
“The very act of [Aaron] having to liquidate actually exacerbates the problem. In an illiquid market, there may be no way out of this death spiral. There’s just nobody on the other side who’s willing to buy this [stock] except at some very deeply discounted price,” he said.
The margin call that UBS imposed on my dad in February of that year did in fact trap him in this death spiral. He asked for and received an extension on the call to fifteen days, but it didn’t matter. He met the call, but it shattered his fund. “It was the worst possible time to do the worst possible thing that I could ever imagine having to do with the portfolio,” he said. “I’d gone almost fourteen years with only one annual loss of two percent and in the next fifteen days or whatever it was, I lost twenty-five percent.” Initially, he thought the situation was fixable. He didn’t tell anyone what was going on — including his wife.
My mom’s first inkling that something was wrong came in mid-March, at a neighbor’s Bat Mitzvah. “I sat next to Joel Hausmann, who was working for dad at the time. When we sat down, he said, ‘How’s Aaron doing?’ I said, ‘Oh, he’s fine! Why?’ He said, ‘Oh, well ‘cuz I wasn’t sure from everything that’s been going on.’ I go, ‘Oh, no, he’s doing fine. He seems to be doing okay.’ I had no idea, absolutely no idea what he was talking about.” Only later that night, on the drive back home, did my mom ask my dad what Joel was talking about. My dad shrugged it off as a “work thing.”
It wasn’t until April that my dad told my mom what was really going on. After the margin call, he’d begun talking to large investors about his situation, trying to get people to put more capital in so that the fund could be saved. After taking the loss, he had to tell all his investors, many of whom were friends and family, that the fund had taken a large hit. “Dear Willow Creek Investors,” he wrote on April 14, “I am contacting you to give you an update on the unusual and unfortunate results that Willow Creek Capital Partners, L.P. (WCCP) has experienced in the first quarter of 2009.” In the newsletter, my dad calmly and carefully sets out the series of events that preceded and then followed the margin call. The year-to-date loss indicated in the letter is an eye-catching 38.8 percent. Toward the end of the letter, he writes: “To say that the actions implemented on February 24 were the most damaging event in WCCP’S fourteen-year history, or my twenty-four-year career, would be an understatement.” By this point, he must have known that people were going to pull out of the fund. He was trying to prevent them from doing so, by explaining everything so prudently.
He had only told my mom what was happening a few days earlier. Her mind immediately went to the party she was in the middle of planning. “I really did not realize how that would look,” she said. “We probably should have canceled it. But we didn’t. Because I was not told that we should cancel it.” My father told her that people were beginning to take their money out of Willow Creek, but that he thought he could fix it. He was going to fix it. He did not tell her that he’d already begun to borrow money from his mom to cover the bills.
As my dad struggled to save his fund, my mom planned the party. It took place in early September. Guests were shuttled in from Marin and dropped off in the driveway of the Yountville house, lined with olive trees. They made their way past the bubbling fountain and manicured hedges to the sweeping lawn, complete with a pond (and swans that kept getting their heads stuck in the fence). If they turned around, they’d be greeted by stone stairs to take them to the aquamarine pool and accompanying pool house. The tent was set up on the far edge of the lawn, decorated in shades of gold, white, and pale green. Thomas Keller, the owner of The French Laundry, catered the affair and took pictures with my parents. In one of the photos, Keller has his arms around my parents, the three of them standing in front of an assortment of appetizers. My mom is beaming, dressed in all white, with pink pearls around her neck and in her ears. My dad is dressed in Levi’s and a blue and white striped button-down. He’s wearing his signature cowboy boots, worn both for aesthetic purposes and maybe to add some extra height to his frame. His hair still has black in it, only sprinkled with some gray and white. They both look nervous. Maybe they know that time is running out, that it’s their last hurrah.
Frances Dinkelspiel grew up with my dad in San Francisco — they spent their adolescence together at parties in their parents’ basements, sharing joints and stale beer. When she came into her inheritance at age thirty, she decided to put some of the money into Willow Creek. As a longtime friend, she also attended my parents’ party — just a few months after receiving the investor letter from my dad. “I’d never been to a party where there was a tent and beautiful food and there was an after-party and dancing and stuff like that,” she said. “But my husband, who came from more of a working-class background than I did, had a very difficult time with this party. He felt it was so over the top. It was so…it just was like a declaration of wealth and power. He had to go off and get stoned somewhere. He just couldn’t cope with it,” she said.
“Shortly after, the fund collapsed. If you’re looking at it from a literary perspective, you can make the analogy that it’s, you know, the pride before the fall kind of thing,” she said. The direct translation she’s talking about comes from Proverbs 16:18: “Pride goeth before destruction, and an haughty spirit before a fall.”
I only vaguely remember this party; in hindsight, I had no idea it would be a turning point for my family. I had just started sixth grade. I wore a Lilly Pulitzer floral shift dress that used to be my sister’s. My braces, pink and green, matched the outfit perfectly.
I gave a short speech after dinner, one hand gripping the microphone tightly while the other one repeatedly smoothed my dress. I can’t remember exactly what I said, but I think I talked about my dad tucking me in every night when I was little. He’d leave my closet light on, and my bedroom door open just a crack so that I could get up and find him if I had a bad dream. He told me that he would be there for me at any second, day or night. He also told me that he’d never let anything bad happen to us. But the truth is, the bad thing was happening at that very moment, inside that white and gold tent. I just didn’t know it. I don’t think he did either.
M y sister told me the other day that I “came to consciousness in money.” She’s not wrong. Until I was twelve, I was spoiled. But I also spent my adolescence and early adulthood trapped in the inescapable aftermath of my dad’s business collapse. The next fifteen years would come to be shaped by a never-ending list of buzzwords from an Oliver Stone movie: an SEC investigation, Chapter 7 bankruptcy, IRS debts, and asset hiding, to name a few. A 2012 headline from our town newspaper read: “Former partners of Kentfield investment manager demanding their money; manager says he was the victim of bank giant.” If you haven’t caught on yet, my dad is the manager in question here.
Over time, the comforts I used to know disappeared one by one: the house in Yountville was foreclosed and sold off by the bank in 2014. Our family home and my mom’s prized possession, 45 Evergreen, was sold in 2017 to pay off debts to the IRS. My parents moved to a rental home in Fairfax. It was the summer after my freshman year of college. My mom started one of a series of jobs in retail. My dad traded in his Maserati for a Prius. “It’s probably the only time that’s been done in Marin County,” he said. My parents did everything in their power to keep my life as unchanged for as long as they could, but that was an impossible endeavor. On the outside, certain things looked the same: I still went to private school (both high school and college), still lived in Marin, albeit in a cheaper, more hippie-friendly part of town. But money, or lack thereof, became the dark cloud that always lingered over me.
When I started writing this article, I had been thinking a lot about victimhood. I thought I was the victim when a boy named Danny, who I’d known since I was three years old, asked me if my dad was going to jail one day after school. I thought I was the victim when my parents depleted the trust I was meant to receive from my deceased grandmother because they couldn’t afford to pay for private school anymore. I thought I was the victim when I held my mother in my arms and rubbed her back, reassuring her that everything was going to be okay when I had no clue myself. My mom had once trusted that my father would protect her and their family forever. That trust was irrevocably broken. She would scream at him for hiding the truth from her; he would sit silent with his head in his hands.
My father believes he’s the victim of UBS’ predatory practices; many of his investors believe they’re the victims of his reckless actions and lack of communication. Can both things be true? I asked Professor Whitelaw who he thought was at fault here, but his answer failed to satisfy me: it’s complicated, he said. It was a mixture of poor regulatory practices by the government, and some bad actors, and some skewed incentives, and a million other things. “It wasn’t clear, right?” he said. “It wasn’t…” Professor Whitelaw took a long pause.
“Look, it was absolutely not clear to everybody that this thing was about to blow up.”
A t this point, I’ve known my parents longer without their wealth than with it. They entered middle age, traditionally a time of retirement and relaxation, with no income coming in. After my dad shut down Willow Creek, his energy was devoted to dealing with debts he owed to the IRS. My parents lost two houses, three cars, and countless friends. I reached out to many of those former friends for this piece. They did not respond.
When I was in Marin most recently, in March 2024, I stayed with my parents in their small rental condo in Sausalito, yet another town they migrated to post-Evergreen. The gray two-bedroom is still a reminder of the past: the furniture that my mom spent years carefully curating has traveled into homes that can barely fit it. Most of it has been sold.
My parents have the same routine most nights. My mom comes home from working her retail job, complaining about how being on her feet all day is getting too hard. My dad, having come back about an hour before her from his own office where he works as a consultant (but still struggles to receive a consistent paycheck), is making her dinner from one of the hundreds of recipes printed out from “nutrition experts” I’ve never heard of. Usually, it’s something with chickpeas. My mom will run herself a bath, change into her pajamas, and make herself a plate. She sits on the loveseat and watches an episode of Suits that she’s already seen at least three times. My dad changes from his blue button-down and Levi’s to the Adidas track pants that his children gave him for his birthday and a red, oversized St. Louis Cardinals sweatshirt. It’s his walking uniform. He hikes the hidden trails of Sausalito almost every night, usually for two hours.
He sits on the checkered armchair next to my mom, and they’ll talk about their days with one eye on the screen. After a few minutes, my mom will say something that inevitably annoys my dad — usually it’s asking him when he’s going to start making money again. He’ll leave for his walk in a huff.
When he comes back, my mom will already be in bed, scrolling through her Instagram feed and trying not to compare her life to those of her former friends. But when she hears the front door open, she always calls out for him.
“Aaron!” she says from the second floor.
“Yes?”
“Can you please come up and say goodnight?”
He always does.
