Business Books/The Last Tycoons: The Secret History of Lazard Freres & Co, By William Cohan, Doubleday:Histories of investment banks that have not collapsed or been swallowed up are usually seemly affairs.
Readers must wait until the leading figures have died or the events are long in the past before they get the uncensored tales of sex and conflict. Happily, Lazard is an exception.
This book's subtitle is: "A tale of unrestrained ambition, billion-dollar fortunes, byzantine power struggles and hidden scandals". That seems accurate enough, except for the word "hidden". Judging from the contents of the book, the partners of Lazard's New York arm never tried hard to conceal internal feuding and sexual licentiousness. Even if one made the effort, another would spill his secret.
Those secrets that remained unspilt before Bruce Wasserstein seized control of Lazard from Michel David-Weill and propelled it to its 2005 initial public offering (IPO) are entertainingly dished out here. William Cohan, a former junior Lazard banker, not only knows where the bodies were buried, but got a guided tour of the graveyard from Lazard's big names, past and present.
Mr Wasserstein would not speak to him, but everyone else seems to have taken the opportunity to settle remaining scores, reminisce about each other's private life and generally philosophise. By the time Mr David-Weill takes the author on a tour of the nude paintings in his Fifth Avenue study, noting one "very, very charming and also relatively erotic" Ingres, the reader hardly lifts an eyebrow.
At 740-odd pages, the result is long, but one sympathises with Cohan. What should have been left out? The account of Felix Rohatyn's jealous clash with Steve Rattner, conducted through various magazines? Or Mr Rohatyn's affairs, culminating in one occasion when André Meyer banged on his locked door to shout: "Felix, why don't you go to a hotel room like the rest of my partners?"
Surely not the weekend memorandum apparently sent by William Loomis, the bank's US chief executive, to another partner, demanding to speak to him on Monday when: "I know that you are shooting some sort of birds"? Or the appetite of the late Edouard Stern, a former Lazard partner who is said to have eaten up to 70 pieces of sushi at a single sitting?
If this seems like strange behaviour, one must say in the Lazard partners' defence that they were under a lot of strain throughout most of the 20th century. Meyer, the mercurial and brutal senior partner from 1945 to 1977 ("I fought him every day for 20 years. You had to," recalled Mr Rohatyn), gave way to the charming but Machiavellian Mr David-Weill, who seemingly ruled by division.
Cohan dutifully records passing events in the outside world, such as the near-bankruptcy of New York, which Mr Rohatyn averted, and various mergers and acquisitions. But the interesting action was taking place in Lazard's allegedly dingy (they never seemed that bad to me) offices in the Rockefeller Center, where the "great men" who advised big companies plied their trade.
The emphasis was on the "men". Cohan records that partners from Mr Meyer to Mr David-Weill and Mr Rohatyn imported a French attitude to extramarital liaisons and the first women who worked there as bankers were apparently propositioned constantly.
One young woman is even said to have been raped by two junior bankers, and according to Cohan's account, the bankers were eased out to avoid embarrassment.
Maybe some of the internal feuding and insecurity was down to the rootless past of Lazard's senior figures. Mr Rohatyn escaped from Vichy France to the US in 1942, while Mr David-Weill's family had to change their names to avoid being arrested as Jews. "Peace is relatively strange. But catastrophe! Ah, I think, back to normal," Mr David-Weill said of his reaction to September 11th, 2001.
After being put in charge of Lazard in 1977 when Mr Rohatyn rejected the job, Cohan recounts how Mr David-Weill repeatedly gave false hope to ambitious bankers such as Messrs Rattner and Loomis, causing them to believe he was willing to cede power to them. By the time that Lazard hit hard times again in 2001, he lacked an obvious successor in a divided and demoralised organisation.
Enter Mr Wasserstein, who out-negotiated Mr David-Weill to wrest control of Lazard from him. Cohan claims that Mr Wasserstein gained control of Lazard for a mere $30 million, the price he in fact paid for a 1 per cent stake (in spite of reports at the time that the figure was closer to $150 million) and Mr David-Weill's agreement to let him run the place.
Cohan, who sympathises with the ancien régime, says Mr Wasserstein turned out to be even tougher than Mr David-Weill and broke Lazard's partnership traditions. Maybe so - but, as he earlier quotes one partner as saying: "Lazard is not a partnership. It's a sole proprietorship with fancy profit-sharing."
After 30 years of intrigue, Mr David-Weill had it coming. - ( Financial Times service )
