Lazard Freres got off to a fast start in building its private placement team, pirating nine of Merrill Lynch’s agents in an aggressive move to equip its new group with a lineup of experienced senior sales pros.
Managing directors Ben Sullivan and William Riddle were the first to defect, and, according to reports, were quickly followed by fellow managing directors Mike Sutka, Scott Church, Bob White, Enrique Cuan, Tim O’Gara, Greg Meyer, Mark Christopher, Suzie White and Fran Lolli. The new hires will report to Lazard presidents Charles Ward and Charles Stonehill, the latter a senior banker that Lazard lured from Credit Suisse First Boston last year. At CSFB, Stonehill headed the firm’s U.S. investment banking division.
Sullivan’s experience at Merrill Lynch centered primarily on communicating with the general partner groups and watching over the due diligence of funds, while Riddle was in charge of sales. Lazard would not comment on the hirings, other than to confirm that it did indeed hire Sullivan and Riddle. Merrill Lynch, through a spokesman, said it would “remain fully committed” to its private placement group.
A source familiar with the situation said that while the secrecy of the hirings was “pretty shocking,” he was not all that surprised at the defections. “The writing was on the wall there. David Webb [the overseer of Merrill’s private placement team] didn’t come from that [area], and a lot of guys there felt that they didn’t get their due.”
Lazard Freres is headed by CEO Bruce Wasserstein, who took hold of the reins in 2001 after he sold his Wasserstein Perella & Co. investment boutique. The source cited Wasserstein’s history in private equity as one reason why Lazard may have made such a push in building the private placement team. “With Wasserstein taking over that ship, he could see the value in the industry,” the source said. “He did the right thing by going after Merrill’s top guys.”
However, while the defection leaves Merrill Lynch without the bulk of its team, the source doesn’t believe that it means the end of the firm’s private placement business. “This is just a shift in the industry right now, but I would never count out Kevin [Albert],” who runs the Merrill division. Albert did not respond to requests for comment.
Lazard Freres also runs its own buyout group, under the name Lazard Capital Partners, which in 1997 closed on its first fund at $150 million. The firm also controls a venture capital fund called Lazard Technology Partners.
Merrill Lynch, according to the most recent data, shares the title as the leader in global private placements with CSFB. The two firms each reported $32 billion of private capital raised in 2001, easily surpassing their nearest competitors that year.