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Frederick Koch, Who Spurned Family Business, Dies at 86

NEW YORK — In 1983, a wealthy American wandered into the Royal Shakespeare Company in Stratford-upon-Avon in England. He saw a scale model of a new theater that the company hoped to build, if only it had the money. The American said he would underwrite the project, but he wanted to remain anonymous.

Three years later, Queen Elizabeth II presided at the opening of the new Swan Theater. The American, Frederick R. Koch, who had built the theater for $2.8 million, stood by her side. But she respected his wish for privacy: She thanked “our generous benefactor” — but did not name him.

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Mr. Koch kept a low profile for most of his life. When the news media mentioned him at all, it was usually in passing in reports about his three hard-charging billionaire younger brothers: Charles and David, who ran Koch Industries, the industrial behemoth founded by their father, and who bankrolled libertarian causes; and William, David’s twin, an eclectic entrepreneur, collector, and yachtsman who won the 1992 America’s Cup. (David died in August.)

Frederick, who bore the aspect of an Edwardian gentleman, had little in common with his brothers. He devoted himself not to oil, the bedrock of Koch Industries, or to politics, but to the arts and historic preservation.

Mr. Koch died Wednesday at his home in Manhattan, where he had lived, as he preferred, in relative anonymity. He was 86. John Olsen, his longtime assistant, said the cause was heart failure.

As an adult, Frederick, known as Freddie, rarely saw his brothers, except in court. In the 1980s and ’90s, the four were embroiled in what Fortune magazine called “perhaps the nastiest family feud in American business history,” with Charles and David, two of the richest people in the world, allied against William and Frederick.

While Frederick did not share the family’s corporate ethos, he did share, to a lesser degree, its immense wealth. This allowed him to pursue his own interests. A philanthropist and patron of the arts, he amassed extensive collections of literary and musical manuscripts, rare books, photographs, and fine and decorative arts. His prized possessions included Marie Antoinette’s canopied bed.

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He also collected manor houses in Europe and the United States. The crown jewel was a 150-room castle in Austria once owned by Archduke Franz Ferdinand, whose assassination in 1914 touched off World War I. The archduke used the castle, known as Blühnbach, as a hunting lodge; Mr. Koch used it for decades as his summer retreat. It provided easy access to the Salzburg Festival, which he attended every year.

Fred’s spurning of the family business helped fuel the disappointment Fred Chase Koch, a self-made man and rugged individualist, felt toward his oldest son. “Father wanted to make all his boys into men, and Freddie couldn’t relate to that regime,” Charles Koch said in 1989.

William Koch said in an interview for this obituary: “When Freddie was born, he was delicate, he liked the arts, he was a singer and loved poetry. He didn’t want to play baseball.”

And when their father sent the boys to ranches to toughen them up, he rebelled. “Instead of baling hay,” William said, “Freddie would hide in the hayloft.”

William Koch said that years later, their father discovered that $700 in traveler’s checks were missing and believed that Frederick, who was visiting his parents at the time, had stolen them. Frederick later told William he had not. In any case, their father was furious and, after a lifetime of frustration with his namesake, considered this to have been the last straw.

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“He threw Freddie out of the house and cut him out of his will,” William said. Through a trust, however, his father, who died in 1967, left Frederick 14 percent of the company’s stock.

That inevitably tied his fate to that of the conglomerate, which today, according to Forbes, is the second-largest privately held company in the country, with annual revenues of $110 billion. The Kochs are the nation’s third-richest family, worth $125 billion.

By 1980, the brothers, always competitive with one another, were engaged in open warfare over the fate of the company. Much of it was driven by William, who enlisted the support of Frederick and a half-dozen other shareholders who wanted to take the company public so that they could convert their stock to cash. Charles saw their moves as a takeover attempt, and the board fired William, leading to a lawsuit and 18 years of legal skirmishing.

In 1983, Koch Industries — essentially Charles and David — settled with William, Frederick, and the other shareholders for $1.1 billion, with $330 million going to Frederick.

William and Charles Koch are Frederick’s only immediate survivors. His estate, Olsen said, including his investments, real estate and art collection, will be used to establish a foundation to promote the study of literature, history, and the arts.

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Frederick Robinson Koch was born in Wichita, Kan. While his father was emotionally distant, his mother, Mary Clementine (Robinson) Koch, was a sophisticated student of the arts and nurtured a similar passion in Frederick.

He studied humanities at Harvard, graduating in 1955. (His father and three brothers all studied engineering at the Massachusetts Institute of Technology.) After college, Frederick enlisted in the Navy Reserve, then enrolled at the Yale School of Drama, where he studied playwriting and specialized in Shakespeare. He received his master’s degree in fine arts.

During the 1980s, Mr. Koch bought two apartments and a half-dozen manor houses. He conducted extensive research on these historic residences and allowed the renovations to be guided by each home’s history, setting, and aesthetics.

One of Koch’s favorites was Elm Court, a Gothic Revival mansion near Pittsburgh. The home’s dozens of gables, stone chimneys, and pinnacles suggest a small English village.

In Manhattan, he owned two homes. One was a French Regency-style mansion on East 80th Street, where he died.

Despite Mr. Koch’s lavish spending on such grandeur, friends and family say he was notoriously frugal. He took public transportation in New York and flew commercially. He reprimanded house guests for not turning off the lights and quibbled over the excessive use of postage stamps. When going to the movies, he made sure to use the senior discount.

One friend recalled, with affection, that about 10 years ago, Mr. Koch spotted a nickel embedded in the asphalt on Fifth Avenue. He borrowed a pen from the friend to try to dig the coin out as cars and buses swerved to avoid him, honking their horns. He stopped only when the pen broke.

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The friend later admonished him, saying he could have been killed and that such a scene would have made for an embarrassing obituary.

Mr. Koch laughed. Imagining the headline, he said: “Ah! The Fatal Nickel.”

But otherwise he was unsparing. He made numerous anonymous bequests to independent theaters in New York and London.

He donated more than 400 items to the Harvard Theater Collection, including manuscripts by Tennessee Williams and George Bernard Shaw and a voluminous collection of photographs. His most substantial gift was to the Beinecke Rare Book and Manuscript Library at Yale.