Wall Street veteran Perella raises $1bn for investment bank boutique

Click to follow
The Independent Online

Joseph Perella, one of Wall Street's most powerful investment bankers, took the wraps off his new company yesterday and predicted it would become a major dealmaking force on both sides of the Atlantic.

Little more than a year after storming out of Morgan Stanley, Mr Perella has launched Perella Weinberg Partners, a finance boutique that will advise companies on mergers, acquisitions and fundraisings.

The 11 founding partners, who include the former Goldman Sachs veteran Peter Weinberg, boast some of the most enviable contacts books in the finance industry, and have attracted backing already totalling more than $1bn (£540m).

Mr Perella predicted that his company would carve out a significant niche between the giant investment banks and other boutique advisers, such as Greenhill, which have emerged in recent years. The aim is not so much to be big, but to be respected, he said.

"The big firms always have a role, but over the years they have changed fundamentally. They have to report quarterly earnings, they have big proprietary trading desks, they make markets, they lend money, you name it. The phrase 'conflicts of interest' is often used. Theirs is a different business model, we are not market share driven.

"And as far as boutiques are concerned, without meaning to boast, none of them began with the team that we have."

Mr Perella's exit from Morgan Stanley in April last year was the most surprisingin an exodus of top executives, and brought to a head a public argument over the way the company was being run. Within weeks, Philip Purcell, Morgan Stanley's chief, had been forced to step down, but talks that might have brought Mr Perella back to the bank stalled.

The new venture has been generating a buzz on Wall Street since planning began in September and as Mr Perella has poached high-level employees from established companies, including at least eight from Morgan Stanley.

The name of the new business had been kept a closely guarded secret until yesterday, after the founders formally signed their partnership agreements at a dinner with investors in London.

It puts the Weinberg name on a securities company for the first time, after years when Peter Weinberg's family has been associated with Goldman Sachs. His grandfather and uncle both ran the bank.

Mitsubishi UFJ, Japan's biggest bank, and the ruling family of Dubai are among investors to have put in $100m (£54m).

The Fisher, Getty and Weinberg families are also backers, as is a consortium of six Middle Eastern governments. Perella Weinberg will have an asset management arm, which will invest much of this money, and is now hunting for senior fund managers to join the business.

In total, the company is aiming for 100 employees, compared with its current total of 30.

The run-up to launch has not gone all Mr Perella's way. Hopes that the firm might be unveiled alongside its first deal by a client proved too optimistic. And last week one of his former Morgan Stanley colleagues, Jon Anda, defected back to their old firm.

"Don't forget Jon only showed up at the shop two months ago. He announced his engagement and then decided he didn't want to get married," said Mr Perella. "The feeling was mutual. We don't want to drag anyone to the altar."

Rivals say Perella Weinberg is launching at a time when it may already have missed the M&A boom that has propelled investment banking revenues close to record highs.

Mr Perella said: "I don't care where we are in the cycle. It is not as if M&A is finished. This has happened because we are a group of like-minded people who want to start a company."

It is establishing offices in Manhattan and in London's Mayfair. The UK partners include Philip Yates, a former head of global M&A at Merrill Lynch.