Few bank CEOs ever become billionaires. Jamie Dimon did. So did Lloyd Blankfein.
And then there’s Ken Moelis, a power dealmaker few people outside Wall Street have probably heard of.
Since taking his boutique investment bank public four years ago, Moelis, 59, retains a 10 percent stake and has a net worth normally reserved for chieftains of hedge funds or private equity giants. He’s now a billionaire, even though his firm is one-hundredth the size of Dimon’s JPMorgan Chase & Co., according to the Bloomberg Billionaires Index.
Perhaps no banker better encapsulates the rewards -- and risks -- of boutique firms quite like Moelis, a devotee of arch capitalist Ayn Rand who got his start in the 1980s under Michael Milken. Since then he’s reeled in one high-profile client after another, from Ted Turner to Steve Wynn, and Carl Icahn to Donald Trump.
Yet his prowess underscores a fundamental question faced by many firms built around a rainmaking founder: Is Moelis & Co. more than Ken Moelis?
“That’s always the question with a boutique when the first generation is there,” said Blackstone Group’s Tony James, one of Moelis’s bosses at Donaldson, Lufkin & Jenrette in the 1990s and now one of his biggest fans. “Who he hands the reins over to is a critical moment of risk.”
Large Stake
James said Moelis & Co. is no longer reliant on its CEO. But there are plenty of worrying examples of boutique firms that flamed out after their founders left. Witness the diminution of Greenhill & Co. after founder Bob Greenhill, 81, curtailed his involvement in the firm. Gleacher & Co. fizzled after Eric Gleacher departed. Wasserstein Perella & Co. was sold to larger rivals a dozen years after its founding.
Moelis, who declined to comment for this story, is planning for the long-term, saying in December that he would step down before he turns 65 to focus more on mergers and acquisitions. Co-presidents Navid Mahmoodzadegan and Jeff Raich, who helped found the firm with Moelis, are seen as potential heirs. The pair own about $94 million and $51 million of company stock respectively, according to the company’s latest proxy filing.
The trio already makes decisions jointly and the firm is bolstering its ranks of potential dealmakers. It advised Broadcom on a $117 billion hostile bid for Qualcomm last year, a role landed by Zach Righellis, who was hired from Barclays Plc in 2015.
But Moelis, who started his career on Wall Street by happenstance, remains the face of the firm and its central dealmaker. He often starts dialing the phone at 5 a.m. and will jet across the world to see a client at a moment’s notice. Friends say dinners are frequently interrupted by hours of work calls. One former colleague recalls Moelis insisting on making an extra call at the end of each working day to generate hundreds of additional prospects a year.