Mergers and acquisitions boutique
is taking a stab at the big time again.
The private partnership, one of the best known names during the 1980s merger mania, is hiring investment bankers and planning to add more equity analysts, according to several people at the firm. Paul Haigny, who heads the firm's technology banking unit, says the firm is being "fairly aggressive" in its hiring program, and the initiative will include some senior hires in his area.
One firm insider says the number of new hires could reach as high as 30. However, several others disputed that number, saying that total likely includes the firm's annual "entering class" of recent college and business-school graduates who take junior-level and associate positions in the firm.
"We're only a firm of 250 now," says a top-level investment banker. "We are not going to try to be all things to all people."
Regardless of the number, it's clear the firm is bulking up in a bid to win more business.
Wasserstein Perella was created in 1988, when Bigfoot-esque investment bankers Bruce Wasserstein and Joseph Perella left
after building it into an M&A powerhouse. The upstart firm, known in some circles as "Wasserella," shocked everybody a year later when it secured a piece of the advisory business in the $25 billion takeover of
. That deal stood as the largest in U.S. corporate history for eight years.
Since then, Wasserstein Perella has seen high and low tides. Its advisory business lagged in the early 1990s when the market was suffering from a M&A hangover. In 1993, Perella left to join
where he is head of investment banking. However, Wasserstein Perella bounced back nicely in 1997, getting the mandate from
Dean Witter Discover
in its merger with
The current staff additions are part of a bold plan for Wasserstein Perella to leverage its M&A mandates into other areas of business, including equity underwriting, an area in which it has little presence, four insiders say.
"The firm wants to take advantage of the number of good people that are available due to the consolidation in the securities industry," says one headhunter. Most importantly, the new hiring initiative will target getting more research equity analysts on board, explains the headhunter, requesting anonymity.
"Wasserstein wants to go after co-management mandates on equity underwritings," he says. "It feels good research will get it into the equity syndicates."
Wasserstein Perella has already hired at least six equity analysts from larger rivals such as
Morgan Stanley Dean Witter
BT Alex. Brown
over the past year in a push supervised by corporate finance chief Stephen Benson. Michael Biondi, chairman of the firm's investment banking unit, is said to be overseeing much of the new hiring plans in the investment banking area, say several people at the firm. Biondi didn't return repeated phone calls.
Fred Seegal, Wasserstein Perella's president, deferred comment to Robert Pruzan, head of the firm's M&A department. Pruzan didn't return several phone calls.
The top-level banker confirmed that Wasserstein Perella wants to evolve beyond simply doing M&A into more underwriting roles. "Wasserstein Perella has tremendous momentum now," says the banker. "We've had our name on a lot of nice transactions so far this year."
The firm is off to a great start this year by almost any measure, advising on nine deals worldwide worth more than $12 billion, according to
. Those mandates include some high-profile Internet deals. The firm was selected last month to represent
in its merger with
. A few weeks before that, Wasserstein Perella, along with
, was named by
to help guide it into the arms of
Indeed, it reportedly was Wasserstein Perella president Seegal's personal relationship with David Wetherell, chief executive of
, that helped cement the recent Net mandates for Wasserstein Perella in the first place. CMGI is a holding company that invests in Internet companies, including both Lycos and Geocities.
Outside the Net, Wasserstein Perella is advising
Rohm & Haas
, the Pennsylvania chemical company, in its $4.9 billion takeover of
announced earlier this year. The firm also is aggressively pursuing foreign merger advisory roles. Wasserstein Perella moved up to No. 12 from 36 last year in the rankings of merger advisers to European companies, according to
. Wasserstein Perella ranked 20th in worldwide M&A advisory last year, working on 47 deals worth more than $40 billion.
Another reason for Wasserstein Perella's bold plan taking shape now is to strike at longtime rival,
, a firm hurt by the recent loss of some key players, according to the headhunter. "I think Wasserstein looks at Lazard as weakened," he says. Lazard fell to 10th in worldwide M&A advisory last year from fourth in 1997, according to Securities Data. It lost more than half its market share during that time.
Lazard Freres' problems started after it lost franchise investment banker Felix Rohatyn to a U.S. ambassadorship position in France in mid-1997. The situation worsened when word leaked out that Michel David-Weill, the patriarch of the Lazard house investment group in New York, Paris and London, was considering hiring the firm's biggest rival, Bruce Wasserstein. That deal, to the relief of a legion of Lazard bankers and deal makers, never went through, but the humiliation of needing help from Wasserstein was keenly felt.
The following spring, Lazard Freres lost two more heavyweights: Kendrick Wilson, head of the firm's financial services group, to Goldman Sachs, and Gerald Rosenfeld, head of investment banking, to
NationsBanc Montgomery Securities
. A spokesperson for Lazard Freres didn't have any comment.
Regardless of how Lazard fares, it's clear that Wasserstein Perella is gunning for more business. "We're a growing business," says one executive at the firm, requesting anonymity. "We're busy everywhere."