IDD`s Banker of the Year - Roger Altman

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January 15, 2007/www.iddmagazine.com
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In a pivotal year for investment banking,
Roger Altman — IDD’s Banker of the Year —
helped drive Evercore Partners’ growth spurt
BANKER OF THE YEAR
Altman poses with some of his colleagues at Evercore:
Left to Right: Roger C. Altman, Jonathan A. Knee, Gil Ha, William O. Hiltz,
Jane Sadowsky, William Repko, Eduardo G. Mestre, Jane Wheeler, Timothy G. LaLonde
Not Pictured: Pedro Aspe, Bernard Taylor, Michael J. Price,
William A. Shutzer, David Ying, Saul D. Goodman, Julian Oakley
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In a pivotal year for investment banking, Roger Altman
helped drive Evercore Partners’ growth spurt
T
o illustrate how Roger C. Altman, chairman and co-CEO
of Evercore Partners, treats his clients, General Mills CFO
Jim Lawrence recounts his firm’s $10.5 billion acquisition
of Pillsbury in 2001.
“We were in the final strokes of the Pillsbury deal and needed some
advice,” says Lawrence, himself a former investment banker. “Roger,”
he says, “was giving us advice from his hospital bed as he was waiting for his heart transplant.”
Altman has since fully recovered, and is running, skiing and
fishing. He also remains a prolific dealmaker, scoring several key
mandates as the firm he helped create grows in prominence.
Evercore completed its best year ever in 2006, advising on $197
billion in global deals, including the largest deal of the year—
AT&T’s $90 billion acquisition of BellSouth. Evercore
augmented its staff by hiring deal heavyweights, made giant strides
in its restructuring business, and expanded in Europe, Asia and
Latin America. And in a final stroke that made Wall Street take
notice, it went public in a successful IPO that raised $84 million.
Its stock rose 18% on the first trading day, to $25 from $21,
which already was above the initial range. As of Jan. 5, its stock
was trading at $37 a share.
“We provide classical advice to our clients,” says Altman, 60. “We
ask ourselves, what would we do if we were they? In a world where
few practice that approach, some corporations, especially some
large ones, value that.” He points to a page of tombstones with
some of Evercore’s largest deals, which include some of the most
impressive names in M&A: AT&T, GMAC, VNU, Swiss-Re. “We
conform scrupulously to that standard,” he says, “and in turn, that
BANKER OF THE YEAR
is why we have such a leadership position with our clients.”
While Altman is a senior rainmaker, bringing in such mandates
as AT&T’s BellSouth acquisition and CVS’s pending $22 billion
Caremark deal, he has no problem sharing the floor with
Evercore’s 31 other partners. Part of this may go back to his days
as assistant secretary of the US Treasury in the Carter Administration and deputy Treasury secretary under Clinton, where
he ostensibly saw the value of a strong team.
Indeed, the other 31 rainmakers at Evercore–some of
them recent recruits–are bringing in their fair share of
business, including Jane Wheeler, Michael Price and
Eduardo Mestre. Wheeler, who joined Evercore from
Morgan Stanley in 2005, has made her mark with
deals that include InterContinental Exchange’s $1 billion acquisition of the New York Board of Trade, and
the sale of Instinet to Nomura. Price led Evercore’s team
advising Level 3 in its $1.2 billion acquisition of Broadwing, and Mestre recently led Evercore’s team advising Realogy in its sale to Apollo Management.
That’s important, not only because the firm values teamwork, but
also because of the possibility that Altman may return to Washington. In fact, when John Kerry ran for president in 2004, word was
that should he win, Altman would become Treasury Secretary. Asked
if he would consider another Washington run, Altman says, “My
focus is on Evercore.” One thing he does know is that Evercore is
gaining traction, and is now “a true institution” that can carry its own
weight without him, should the need arise. “I would be a complete
failure if the firm ever misses a beat after I leave,” he says.
around,” Altman says. In 2006, Evercore hired several senior managing directors with industry expertise, including Gil Ha, a former
managing director at Rohatyn Associates who worked on the
AT&T/BellSouth merger with Felix Rohatyn, and Jane Sadowsky,
a former co-head of Citigroup’s North America power investment
banking practice.
Evercore’s Roger
Altman: ‘I would be a
complete failure if the
firm ever misses a beat
after I leave.’
In late 2004, Evercore made perhaps its highest-profile hire,
bringing in Citigroup’s former chairman of investment-banking,
Eduardo Mestre. Mestre, who had been involved in such deals as
AOL’s acquisition of Time Warner, worked with Altman on the
AT&T deal. He is now vice chairman and head of Evercore’s advisory business. “They had a major coup by bringing in Eduardo
Mestre,” says Lawrence, who knew Mestre from his years at
Solomon Brothers.
The hiring of Bill Repko, former head of JP Morgan’s restructuring practice, and David Ying, from Miller Buckfire, has also been
bearing fruit, as Evercore is advising the Cerberus/Delphi restrucFiscal and Human Capital
Undoubtedly one of the best ways to keep that beat going–with turing as well as Northwest Airlines.
or without Altman–is to secure enough capital. The IPO puts
In addition, Evercore has an investment management business,
Evercore in position to continue going after top bankers and overseen by president and co-CEO Austin Beutner, 46, who
further its global expansion. Already, it has acquired Mexico-based co-founded Evercore with Altman in 1996. Chairman of Evercore
Protego Asesores, an advisory boutique and investment manag- Capital Partners and of Evercore Ventures, he is also former
er; forged an alliance with Mizuho Securities of Japan; and president and CEO of The U.S. Russia Investment Fund. Beutner
expanded in Europe via the acquisition of UK advisory boutique and Altman met when both worked at the Blackstone Group,
Beutner becoming Blackstone’s youngest partner. The
two run Evercore together, with Beutner based in Los
Angeles and Altman in New York.
Evercore’s Austin
The investment management business is slated for
Beutner: ‘An important
growth both geographically and by product, according to
the company’s filings. Evercore is also beginning to raise
example of the culture
its third private equity fund, which will be part of the
we are building: We
public company and will help balance Evercore’s
revenues,
which have been recently weighted towards
didn’t name the firm
the advisory side. Currently, only management fees and
after ourselves.’
a small portion of the carried interest of Evercore’s
private equity business are included in its results. In 2006,
the Evercore-managed private equity funds generated
Braveheart Financial Services. Braveheart’s advisory heavyweights, more than $30 million in carried interest, of which only approxiBernard Taylor, Julian Oakley and Lord Michael Forsyth are mately $2 million was included in Evercore’s results. Evercore
now part of Evercore. Braveheart recently advised on UCB’s $5.6 expects that a larger portion of carried interest generated from
billion acquisition of Schwarz Pharma.
future funds will be included in its future results. For the first three
Evercore is committed to adding three or more new advisory part- quarters of 2006, advisory revenues were $115.7 million on a
ners every year. “Being small enables it to recruit the best talent pro-forma basis, or 85.7% of total revenues.
BANKER OF THE YEAR
For all the growth plans, Altman and Beutner have
no intention of ever growing larger than a boutique.
“The best businesses are those that do a few things well
and stick to them,” says Altman, sitting in his airy,
glass-walled office in midtown. “We are not going to
lose our boutique culture or branch out to 24 new
product lines.”
Both Beutner and Altman speak with a streak of
idealism, stressing that this is not all about money, but
about people. “An important example of the culture we
are building: We didn’t name the firm after ourselves,”
says Beutner.
“We have painstakingly built a culture which sails
against the wind,” adds Altman. “Wall Street is notorious for negative cultures. We disavow that. We
think that if you work as a team, support each other
and work assiduously to provide an environment
where people are more secure, that translates into
productivity.”
More About Altman
Evercore Partners 2006 Notable
Transactions ($ in millions)
Date
Announce
Target
Acquirer
Transaction
value
3/5/06
BellSouth
AT&T
$89,432
11/2/06
Caremark
CVS
$22,103
1/23/06
Albertsons
CVS
$17,368
1/16/06
VNU
Investor Group
$11,287
6/14/06
Winterthur
Axa
$9,989
4/3/06
GMAC
Investor Group
$7,853
12/17/06
Realogy
Apollo
Management
$6,692
6/30/06
Travelport
Blackstone Group $4,300
Telesat
Canada
Investor Group
$2,842
Broadwing
Level 3
$1,214
Instinet
Nomura
Holdings
$1,200
The productivity theme is confirmed by folks who
12/18/06
know Altman well. “Roger has extraordinary ‘bandwidth’ as an individual,” says Will Hiltz, a senior man10/17/06
aging director who worked with Altman on many
11/2/06
deals including CVS, Pillsbury, and Credit Suisse’s $10
billion sale of Winterthur to AXA. “In addition to the
extreme focus and drive one might expect of success9/18/06
ful investment bankers, he is also extremely generous
9/15/06
and shows real interest and concern for his partners
and others as individuals, not just as employees.”
Altman says that for all his passion for investment
banking he loves getting away from work to spend time with his wife,
the writer Jurate Kazickas and their three children.
Born and raised in Boston, Altman’s father Sidney–a broker for
food manufacturers–passed away when Roger was 10. His mother, Geraldine, was a librarian, which explains Altman’s love for
books. He is an investor in Atlas Books, a publishing company
run by the journalist James Atlas. He’s also an investor in an art
gallery.
After earning a BA from Georgetown University and an MBA from
the University of Chicago, Altman landed a job at Lehman Brothers,
becoming a general partner in 1974. In 1977, he served as assistant
secretary of the US Treasury for four years in the Carter Administration. He later returned to Lehman as co-head of investment banking
and a member of the firm’s management committee and board.
After Lehman was sold to Shearson/American Express in 1987,
Altman joined the Blackstone Group, where he met Beutner and
Commonwealth Citizens Comm.
$1,109
NYBOT
$1,067
ICE
served as vice chairman, head of M&A and an investment committee member. In 1993, Altman returned to Washington to serve as
deputy secretary of the US Treasury under President Clinton but
resigned two years later in the midst of the Whitewater affair,
although he was cleared of any wrongdoing.
After rejoining the private sector, Altman, along with Beutner
and a third partner, David Offensend, went on to found Evercore
in 1996. Offensend left three years ago and is now a senior VP and
chief administrative officer of the New York Public Library. Insiders and observers agree that Altman has become the chief builder
and retainer of relationships at Evercore, where a culture of team
work and of building deep client relationships reflects the values of
its founders. “He makes more phone calls, writes more letters and
sends more emails than anyone I’ve ever seen,” says Hiltz.
Avital Louria Hahn; [email protected]
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