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FELIX ROHATYN AND HIS ERA: REST IN PEACE
Felix Rohatyn died yesterday at age 91. “Felix the Fixer,” head of the Municipal Assistance Corporation (financial savior of New York City), first among equals at the legendary Lazard Freres, trusted consigliere to corporate and political titans, deal maker extraordinaire, pre-eminent investment banker of his generation. Felix, as he was known on the Street, is little known or remembered by the current crop of bankers. But in his day, he was the man. His passing is a book-end.
I had the good fortune to work on the other side of the table from Felix on several high profile deals in the 1980s and 1990s – the leveraged buyout of RJR Nabisco, Matsushita’s acquisition of MCA and the Time Warner merger, among them. In Bryan Burrough’s Barbarians at the Gate, I am quoted as saying how disappointed I was that Felix didn’t attend the KKR presentation I made to the RJR Board. That indicated that we weren’t taken seriously and that the deal was cooked for Ross Johnson (as it likely was at the time). But my interactions with Felix were minimal in those deals – I was at the table largely as the sidekick to my boss, Bruce Wasserstein. (Bruce was a peer of Felix – although not an equal, as Bruce would have admitted. Bruce treated Felix with awe. When Felix called, the portly Bruce abandoned his usual waddle and ran to pick up the phone.) I did have the opportunity to watch Felix in action up close and personal in our joint representation of The Henley Group -- an early 1990’s conglomerate spin-off from Allied Signal, led by a high-energy CEO named Mike Dingman. Felix sat patiently at the table, discussing strategy with Mike and his team and the other bankers. What struck me was his modesty. Felix spoke softly and rarely. He wore a simple wool suit off the rack – unlike the rest of us in our slick, custom-tailored Brioni. Felix was often interviewed on TV in those days, as the sage of Wall Street. Mike asked Felix to give us his forecast for economic growth over the next few years. Felix’s response: “Mike, I have no idea. That’s just something I talk about on TV.”
The New Yorker wrote a profile of Felix in 1983 and we young bankers made careful notes. Felix discussed his mastery of the craft. He knew the numbers intimately. When a young banker showed him a spreadsheet, he could detect the errors almost preternaturally. Felix served the client, not the transaction. He wasn’t greedy for his own financial success, he was focused on his client’s success. The financial rewards took care of themselves. Felix was a banker in the tradition of the great merchant bankers of an earlier age: the Barings, the Rothschilds, JPMorgan, Jacob Schiff. He moved easily between the worlds of business and politics and was often the link between them. When New York City went bankrupt in the 1970s, Hugh Carey called on Felix to structure the bail out. Which he did with amazing deftness. In the process, Felix developed a bond with Victor Gotbaum, New York’s most powerful union leader. They played squash together at the Racquet Club in Brooklyn.
One pinnacle eluded Felix: he never became Secretary of the Treasury. Although a Democratic power broker, Felix had been at the game for a long time. And as the old saying goes, never try to join a club after the age of 45. Some enemy will give you the blackball. Felix left Lazard in the late 1990s; a new set of aggressive bankers came to the fore. He served as Ambassador to France, wrote books, advised CEOs and decried the new world of financial derivatives and highly leveraged transactions. Wall Street had passed him by.
There are no investment bankers today of the stature of Felix Rohatyn (or of my old boss Bruce Wasserstein, for that matter). The business is too large, too capital intensive and too institutional. The trusted advisor is increasingly rare. The lessons of Felix are still relevant, however: master the numbers, serve the client, be politically astute. There are a few bankers in the field today who emulate Felix – although they may not know it. But the mastery and integrity are in short supply. That’s a pity.