Fortune Profiles Guggenheim Partners, A "Powerhouse On The Prowl"
Guggenheim Partners’ “eye-popping Dodgers acquisition has been only one of a handful drawing ever more attention to the firm,” and the N.Y.- and Chicago-based operation “has been turning up everywhere” in L.A., according to Cendrowski & Bandler in a FORTUNE cover story. Guggenheim is a “powerhouse on the prowl,” and what not long ago “was a small office overseeing a venerable family fortune has burgeoned into something much different and much bigger.” Guggenheim now manages $170B "for institutions, individuals, and insurance companies.” The firm’s “secretiveness is partly strategic and partly a reflection of the reserved, stolid personality" of Guggenheim CEO Mark Walter. He has “focused on managing the rapidly expanding firm, while its more frenetic president, Todd Boehly, has been driving the glitzy new deals.” A former employee said, "They want to be the dark horse in the shadows." But Guggenheim also “knows it's growing too large to escape scrutiny.” But one one “prominent client -- former junk bond king Michael Milken -- is bringing the firm unwanted attention.” The SEC reportedly is “investigating his dealings with the firm and whether they violate Milken's ban from the securities industry.”
THE FACES OF THE FIRM: Guggenheim's “rapid growth in assets under management -- from $5 billion to $170 billion in 14 years -- is a tribute to the steady hand" of Walter. Cendrowski & Bandler write he is the “picture of Midwestern diffidence, the sort of dependable guy you'd imagine running your local bank if Frank Capra were making movies today.” He avoids the spotlight “so assiduously that he confesses that his conversation with Fortune is only his third formal interview ever.” He is “circumspect and thoughtful.” By contrast, Boehly “is a whirl of energy,” and at 39 he “still resembles a boy forced to wear proper adult clothing.” But Boehly's appearance “belies his role,” as he is Guggenheim's “chief dealmaker.” Boehly is “most excited about the potential of live events,” and the deal for the Dodgers “hit Boehly's sweet spot.” Walter, Boehly and a Texas energy investor and client named Bobby Patton “each contributed" $100M to the acquisition. Magic Johnson added $50M, while Peter Guber contributed $25M. The remaining $1.2B “came from insurance assets managed by Guggenheim.” Meanwhile, Guggenheim has been “viewed as the leading suitor” to acquire AEG. However, sources said that it has “recently backed off.” The situation “could change, but right now Guggenheim is no longer the front-runner.” Going forward, the firm is “still on the hunt for deals,” as it wants to “add insurance assets and bolster its live events business” (FORTUNE, 3/18 issue).