Bruce Wasserstein:
deal hustler and tout

Bruce Wasserstein unleashed a flood of Wasserstein's Monsters on corporate America.  Only one guy profited from the resulting carnage.  

By U. Netanya Tokef
Obituary Writer

It took 61 years for Bruce Wasserstein to find someone whose pocket he couldn't pick, but on October 14, 2009 the Grim Reaper completed his hostile takeover of the once-high flying financier. The traditional form of closing announcement is planned: a tombstone.

It's hard to think of any other non-criminal pillar of American capitalism who had such a transformative effect on business without accomplishing anything of lasting value. Henry Ford built cars. Bill Gates brought the PC, albeit buggy, crash-prone, and virus-ridden, into everyone's life. Even the Waltons brought low-priced crap to the impoverished masses of the hinterlands. What did Bruce Wasserstein do to earn the better part of a billion dollars?

Answering that question requires looking back about 30 years or so, a task beyond the ability of our current news media, who briefly fawned over the departed mogul until they realized he was no longer in a position to do anything for them.

It's hard for the current greedy generation of Ivy League undergraduates to realize that in the '60's and '70's, the vaunted phrase "investment banking" never passed the lips of their parents.  Wall Street was regarded a safe, dull place where dummies and jocks could earn enough for a Park Avenue co-op and a second wife, but hardly the sums that every 29-year-old "i-banker" now regards as his or her God-given right.

That's why "Mad Men" is set in advertising, not in the grim granite towers of lower Manhattan that then held such departed colossi as First Boston, Salomon Brothers, or Kidder Peabody. The old Wall Street firms spent their days collecting fixed commissions, dispensing supposedly sage advice to corporate boards, and reviling the intelligence, skills, grooming, and dress of their counterparts in firms of a different ethnic cast (or caste). It was all very jolly and pretty much under the radar.

Enter Bruce Wasserstein (and a couple of his compatriots who are still walking around in apparent good health).  Wasserstein grasped that his contemporary world had plenty of three important commodities: (a) capital, (b) commercial banks unable to price risk properly, and (3) stable, if not stolid, public companies that commanded little attention or respect from Wall Street analysts. With those three elements, Bruce understood it was pretty much possible for anyone to buy anything.  If the deal worked, Bruce got a huge fee.  If the deal cratered a year later, Bruce still got his huge fee, plus the chance to resell the wreckage to someone else.

All he needed were some swashbucklers who were willing to risk billions of other people's money overpaying for dismal assets.  Soon enough, a series of Wasserstein's Monsters lumbered into Manhattan, the more obscure, the better.  Wasserstein made it possible for heretofore unknown Ottawa landlords and finaglers from the Australian outback to engulf and devour great retailing and industrial firms.  Of course, these creatures had no clue how to operate these businesses so as to make money or even generate enough cash to service the monumental debt that Bruce told them to take on. If you've been to Bonwit Teller or Jordan Marsh lately, you'll know what we mean.

As for the little people who beavered away for modest salaries at these soon-to-disappear institutions, well, they could read up on their Schumpeter in the unemployment lines. Wasserstein was off to his next deal. Like Wehrner von Braun, once the rockets went up, he didn't care where they came down. That wasn't his department.

But the most fun was yet to come, if only because Wasserstein's next generation of victims generated no sympathy from anyone.  Having noticed that the real money in deal touting was not the fee for getting it to the finish line before it drowned in its own debt but in owning the tout shop, Wasserstein and some of his buddies set up their own "boutique."

It didn't take long for one of the brain-dead banks that kept lending into these crappy deals to offer to buy Wasserstein's outfit for the bargain price of $1,370,000,000. Having trousered the swag, Bruce stuck around long enough to fulfill the terms of his employment agreement – a year – and then headed for the hills, leaving the poor dumb Krauts with nothing but his name on the door. In dealmaking, such an asset is known as "goodwill."

But like the producers of the "Saw" movies or Kim Kardashian, he was able to draw from the same well again and again, capping his career with a more or less hostile takeover of the firm once known as Lazard Freres. Hey, no one ever forced anyone to buy what Bruce was selling.

Later in life, perhaps realizing the utter pointlessness of his chosen profession, he dabbled in real businesses like magazine publishing and dropped $25 million on the charity that tugs at all of our heartstrings:  Harvard Law School. Toss in a few wives, and that's pretty much that.

The reader may protest that we're being a little tough on the late titan of Wall Street, who after all isn't around to defend himself, or even pay someone else to do so.  But we think that, wherever he is, Bruce might be smiling because we're only following in his footsteps: we're pounding away on some poor bastard who, through no fault of his own, isn't able to fight back.

Of course, Bruce would wonder what kind of a schmuck would do it for free.