William Cohan's book on Lazard tells the story of the ambitious men behind the storied investment bank, writes Richard Gillis
The Last Tycoons were a small group of men who ran Lazard Freres & Co, one of Wall Street's most storied institutions. William Cohan's book on Lazard reveals the personal and professional journeys taken by the so-called "great men" of the investment bank.
These people did much to shape the world of investment banking as it is known today. They made vast fortunes. But beyond the stories of huge ego, ostentatious consumption and boardroom battles, Cohan laments the end of an era, a shift in the nature of banking, as high-profile individuals give way to faceless corporatism.
"Lazard's was the ultimate star system," says Cohan, talking to The Irish Timesthe morning after The Last Tycoonscollected the FT Goldman Sachs Business Book of the Year award last week. The great men based their business on the quality of their advice. Unlike other major banks, such as Goldman Sachs or Merrill Lynch, they risked little of their own capital offering only ideas. This difference in approach lent the bank a mystique to run alongside the colourful lives of its most well-known inhabitants.
"Wall Street is still awash with risk but it is now all about the institution, the brand, the global 24/7 idea that any deal anywhere in the world can be done for you and executed immaculately.
"It doesn't matter who your banker is, the individuals can leave and start a hedge fund and there will be someone right behind him. The service provided by the bank remains the same, it's seamless. That is a new concept over the last 10 to 15 years on Wall Street."
In the early 1980s all of Wall Street was like Lazard. Small, private, local rather than global, says Cohan. "Then Morgan Stanley and Goldman Sachs and the rest went public the business changed completely."
"It's an indelicate comparison but the big institutions are like McDonald's or Burger King, you don't want to have any doubts about that cheeseburger."
Cohan is well-placed to tell the tale. He was an journalist who became a successful Wall Street banker, spending six years at Lazard before going on to be managing director of JP Morgan Chase. The book, which Cohan says he was born to write, beat off fierce competition to win the prize, most notably Alan Greenspan's book.
The first part of this 700-page book looks at the history of the bank. Andre Meyer's business nous and remarkable contact book elevated Lazard to be the preferred bank of the rich and famous of New York society.
"Meyer's genius was that he surrounded himself with hungry and brilliant people, quite often from the same immigrant communities from which he himself rose," says Cohan. One of these, Felix Rohatyn became a dominant figure on Wall Street in the 1960s and 70s.
Tagged Felix the Fixer by the media, he was credited with creating the mergers and acquisitions business. Rohatyn's influence allowed the bank to walk the corridors of power, most notably as an adviser to Richard Nixon. He offers an insight in to Meyer's personality: "He (Andre Meyer) was the most ruthless, realistic analyst of human character I have ever met. I fought him every day for 20 years. You had to. If you didn't fight him, you were finished. He destroyed a lot of people."
One of the themes of the book is succession, the passing of power from one generation to the next. Bound up in this issue is class. When Meyer's health became an issue (he died in 1979), Michel David-Weill, a member of one of the two families who controlled Lazard, took charge. From there the battle for the top seat was ferocious, ending with Bruce Wasserstein - "Bid em up Bruce" to his detractors - who took the bank public in 2005.
Wasserstein was sold a one percent stake by David-Weill for around $30 million, a move the former owner now sees as a mistake. "Maybe I should have forced him to put in $100 million to $150 million," said David-Weill later. Wasserstein was also given a further 7 per cent stake free of charge. By December 2006, that stake was worth about $560 million, according to Cohan.
The last remaining great men have been icy in their silence says the author, which he finds unsurprising. "I said to Michel (David Weill) the last time I saw him that once he's done hating me he'll see that it was an accurate portrayal of the business. But he's not done hating me yet."
