Saturday, May 13, 2006

Personalities: Wall Street Influentials 0 comments

DanielXX's intro: I saw an article in Salvator Dali's blog Malaysia-Finance Blogspot that listed down the current key influential people on Wall Street (extracted from New York Magazine). While they (mainly investment bankers, private equity heads and fund managers) probably do not deserve individual mention in separate articles, they represent the movers and shakers on Wall Street currently. So I had to cut and paste the article here.

(P.S: The following were extracted from another source and is not my original work.)

Generally I do not want to do much cut and paste, but this piece from New York Magazine is worth reading. The magazine did a report on the influential people in 24 categories, naturally we are interested in the Wall Street category. Of the entire group, I think Gene Marcial and David Swensen are the standouts in my books (especially Swensen).

Henry Paulson - Chairman and CEO, Goldman Sachs. Wall Street’s last king. Paulson, who has presided over Wall Street’s most storied investment bank since 1998, just delivered Goldman’s most profitable—US$2.6 billion—quarter on record. A list of the most influential people on Wall Street could be mostly Goldman Sachs executives, and it wouldn’t be wrong. Though much smaller than the megabanks, no institution is more scrutinized, none more illustrious, and none more dominant than Goldman. And, possibly, none more arrogant: The firm has recently been accused of courting conflict; it worked both sides of the NYSE-Archipelago deal. Paulson has refashioned Goldman into a trading-profits-mad virtual hedge fund. Credit president, COO, and heir apparent Lloyd Blankfein, a former trader whose path upward was smoothed by the departure of former crown prince John Thain. Today, traders trump i-bankers in the pecking order at Goldman, and Hank Paulson’s bet on Blankfein is a bet that the trading side can keep the money rolling in.

John Thain - CEO, NYSE Group. Thain is killing the floor trader to save the exchange. Just three years after the ouster of his infamous US$187 million–earning predecessor, Dick Grasso, Thain has revolutionized the Big Board by merging it with its electronic rival Archipelago Holdings. Grasso got the publicity, but it’s Thain, who came from the banking side of Goldman Sachs, who’s changed the exchange fundamentally, transforming the 214-year-old member-owned not-for-profit into a publicly listed, modernized trading powerhouse that today plays home to 2,780 stocks worth a combined US$22.5 trillion. The Archipelago deal also signaled the death knell of the exchange’s storied trading floor, rendered virtually obsolete by electronic trading. By the way, Thain’s salary is US$6 million.

Jamie Dimon - CEO, JPMorgan Chase. The most closely watched man on Wall Street, even if he’s mostly watched for what he hasn’t yet done. After being sacked as Citigroup president by Sandy Weill in 1998, Dimon retreated to Chicago and overhauled Bank One. The prodigal son returned two years ago, when JPMorgan snapped up Bank One. Still untested as CEO (he took over from Bill Harrison in January), Dimon made his first, relatively small-time move last month, nabbing parts of Bank of New York to cement his lead in New York–area retail banking, and the purchase looks astute. The charismatic Dimon is seen as Weill’s spiritual heir, the most dynamic guy on the Street, in contrast to Weill’s actual successor at Citigroup, Chuck Prince, a lawyer and caretaker CEO put into place to solve Citi’s Spitzer problems.

Stanley O’Neal - CEO and president, Merrill Lynch. The turnaround artist. When O’Neal assumed the top post of the world’s largest brokerage firm in 2002, Merrill Lynch was a perennial also-ran in underwriting and M&A advisory work. O’Neal slimmed down Merrill, paring a third of the firm’s staff and shedding less-profitable businesses. Merrill’s stock doubled and profits tripled to US$5 billion. As rivals John Mack of Morgan Stanley and Dick Fuld of Lehman Brothers scramble to find growth opportunities, O’Neal found his in an Upper East Side diner earlier this year. Over eggs and cereal, he unloaded Merrill’s US$549 billion asset-management business to Larry Fink’s BlackRock, beating out Mack for the deal. In return, his 15,000 brokers get access to BlackRock’s US$1 trillion worth of assets.

Larry Fink - Chairman and CEO, BlackRock. The most-wanted money manager on Wall Street. Critics griped that Fink, a veteran bond trader, couldn’t sustain BlackRock’s 21.5% average annual profit growth based on its bond exposure. So Fink responded in February by snapping up Merrill Lynch’s investment-management business in exchange for 49.8% of his firm, a breathtaking deal that gives Fink’s asset-management juggernaut access to an astonishing US$1 trillion portfolio second only in size to Fidelity’s. The deal also keeps BlackRock, whose shares have risen tenfold since going public in 1999, firmly in Fink’s control. Industry watchers took note of the larger picture: One of the Street’s biggest bond buyers was taking his money and running . . . to the stock market.

Carl Icahn - Founder, Icahn Partners. Wall Street’s most notorious predator still breathes fire. More than twenty years after he perfected the dark art of corporate extortion dubbed greenmail, Icahn’s presence still inspires shudders in executive suites worldwide. These days, he conducts his hostile takeovers under the spit-polished label of “shareholder activist,” aligning his US$2 billion eponymous hedge fund with embittered shareholders. His modus operandi rarely varies. Either he battles management for changes aimed at prodding stagnant share prices—as in his bid to break up Time Warner—or he actually seizes a company and installs cost-cutting managers. Scores of aggressive hedge funds and private-equity managers, including Warren Lichtenstein of Steel Partners, and Pirate Capital’s Zachary George, take their cues from the Icahn preybook.

Steven Cohen - Chairman and CEO, SAC Capital. The hedge-fund heavyweight Cohen literally moves markets. He controls one of Wall Street’s most powerful trading firms, believed to account for as much as 3% of the NYSE’s daily volume. (That’s something like 60 million shares per day traded by SAC alone.) The phenom commands 50% fees; lesser managers get 20%. Last year, he reportedly pocketed $500 million. No wonder he has spawned countless imitators, as B-school grads shun Wall Street in favor of Greenwich, Connecticut, home to more than 100 hedge funds, including SAC. Worth an estimated US$2.5 billion, Cohen has become one of the most aggressive art collectors in the world; it was a seismic event when he started buying Impressionist works again last fall after a contemporary binge.

Stephen Schwarzman- Chairman and CEO, Blackstone Group. Private equity used to be viewed as unseemly, reserved for louche Gordon Gekko wannabes. No longer. The king of the hill is Schwarzman, who waltzes in rarefied society circles as easily as boardrooms. (Schwarzman holds the most-vaunted of society thrones, chairmanship of the Kennedy Center.) Private equity rivals the hedge fund as the hottest kind of shop on Wall Street, but Schwarzman is ahead of the curve; Blackstone is rivaled only by Washington, D.C.’s Carlyle Group as the most successfully institutionalized private-equity firm. Like any superstar, Schwarzman has spawned scores of copycats, who’ve driven up prices and made good deals scarce. Still, despite the glut, Schwarzman was able to raise a US$12.5 billion fund last year.

Stephen Feinberg - CEO and senior managing director, Cerberus Capital Management. Named after the three-headed dog that guards the entrance to Hades, Cerberus once suffered a reputation as Wall Street’s scrappy pit bull, investing in ailing companies no one else wanted. But the secretive Feinberg has refashioned Cerberus, founded with a paltry US$10 million in 1992, into a gargantuan, do-it-all firm that controls companies with total sales topping McDonald’s and Coca-Cola’s. Cerberus recently bested legendary private-equity firm KKR to buy out GMAC, General Motors’s lending arm, and snatched up iconic brands such as the Albertsons grocery chain, Burger King and Alamo Rent A Car. Cerberus embodies the rise of a new, widely imitated business model, in which the old demarcation lines of hedge fund, LBO firm, or private equity don’t apply anymore. Though his image may have softened, Feinberg is still biting.

David E. Shaw - Chairman, D.E. Shaw & Co. The Bill Gates of computer finance. Wall Street’s resident math guru runs one of the world’s largest hedge funds, with US$20 billion under management. A former computer-science professor at Columbia, Shaw is a pioneer in quantitative investing, which relies on sophisticated computerized algorithms to profit from inefficiencies in the market. Famed for its exclusive hiring process, D.E. Shaw reportedly extends an offer to only one in 500 applicants. ( founder Jeff Bezos is an alum.) An estimated 16% of hedge-fund assets are managed by “quants” like Shaw. Among his most serious disciples (and competition): Jim Simons of Renaissance Technologies and Ken Griffin of Citadel Investment Group.

Byron Wien - Chief investment strategist, Pequot Capital Management. Though fortune-telling is de rigueur on Wall Street, Wien’s predictions are anticipated with the sweaty angst reserved for interest-rate hikes. The former strategist at Morgan Stanley, who recently made the common Wall Street semi-retirement move of joining a private-equity firm, has been publishing his annual list of “Ten Surprises” since 1986; he hosts annual summer lunches at his Wainscott home, where finance titans like George Soros and Steve Schwarzman don futurist hats themselves.

David Swensen - Chief investment officer, Yale University. The intellectual godfather of the hedge-fund era. Swensen, superstar manager of Yale’s US$15.2 billion endowment (average annual return: 16 percent), was an early advocate of hedge-fund investing, which spurred traditionally conservative pension-fund and endowment managers to follow suit; their money has been the fuel of the hedge-fund boom—and they’re expected to pour US$300 billion more into hedge funds within two years. His 2000 book, Pioneering Portfolio Management, is revered; last year’s Unconventional Success, which came out blisteringly against mutual funds, is gaining a similar reputation among individual investors. Swensen has created a generation of fund managers. When managers set up their own fund, they look for an investment from Swensen; it’s the Good Housekeeping seal of approval. Incredibly, Swensen earns just US$1 million a year at Yale, though his Connecticut compadres easily command 50 times that.

Alan Hevesi - Comptroller, New York State. Hevesi administers the second-largest pension fund in the country, with a whopping US$140 billion in assets earmarked to pay retirement benefits for 968,000 current and former civil workers. Hevesi ended the year up 8.5%, beating the S&P 500 and his own benchmarks. Sweet vindication for the countless, some say gratuitous, street fights he’s picked with everyone from Governor Pataki, over the state budget, to WorldCom, which won Hevesi a US$6 billion settlement.

David Faber - Co-host, CNBC’s Squawk Box. What’s the breakfast of champions on Wall Street? Coffee, bagel, and Squawk Box, co-hosted by Faber, dubbed “the Brain” by fans. CNBC is a trading floor’s wallpaper, and Faber’s stature allows him to debunk Internet rumors in real time; he’s a lifesaver for corporate flacks. Though market data abounds online, and real scoops have proved elusive, Faber remains the man investors can’t afford to miss.

Gene Marcial - “Inside Wall Street” columnist, BusinessWeek. Main Street’s most-followed stock picker. Though mocked and dismissed by Wall Street professionals, Marcial, who has written the weekly “Inside Wall Street” column since 1981, buoys a stock with a mere mention in his column, often for only the first day the magazine appears. But that’s long enough to send investors scrambling for advance peeks. Last month, two workers at BusinessWeek’s Hartford, Wisconsin, printing plant were charged with stealing magazines off the presses to get an early start on Marcial’s picks.

Robert Rubin - Director and chairman of the executive committee, Citigroup. A god. But in finance, Rubin, the former Goldman Sachs trader who was Bill Clinton’s Treasury secretary, is not influential at all: Citigroup, where he’s been since 1999, has been hobbled by regulators. Yet Rubin is bigger than the Street: For his role in handling the 1997–98 Asian financial crisis, he’s become the living embodiment of the Clintonian idea that capitalism—and specifically globalization—can serve a moral purpose. And he’s the living case for the argument that Democrats can manage national economic policy more prudently than the other party.

(The above was extracted from Salvator Dali's excellent blogsite on the Malaysian stock market. It originated from the New York Magazine.




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