Power struggle may see Lazards run by committee

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The Independent Online
Michel David-Weill, the legendary financier who runs the Lazard investment banking empire, may set up a committee of three to five bankers to run the group rather than hand over power to a single individual.

This could be one possible solution to the struggles over the succession that have seen Mr David-Weill fall out spectacularly with his dashing young son-in-law, the French banker Edouard Stern, until recently the favourite as heir-apparent.

In an interview to be published next week in Vanity Fair, the US magazine, Mr David-Weill says the Lazard group - based in Paris, London and New York - has grown so big that he is now unsure it can be run by one man.

He says he is no longer certain that "the best structure in the next generation is the same structure as today".

One possibility is to run Lazards through a group of bankers, one each in the three main centres and one or two others "not running offices, but with more ideas, more capital-minded," Mr David-Weill says.

Vanity Fair is unlikely to be pleasant reading to Mr David-Weill. One source calls him a ruthless operator who "enjoys setting people up against each other".

He is also described by colleagues and acquaintances variously as chilling, mean, cold and manipulative.

According to Vanity Fair, candidates for the new Lazards committee suggested by Mr David-Weill include David Verey, chairman of the London bank, Ken Wilson, the former Salomon Brothers banker who has an influential role in New York, and Steve Rattner.

It was Mr Rattner who had a very public falling out last year with his senior colleague Felix Rohatyn, the doyen of the Lazards New York office.

Mr Rohatyn described Mr Rattner, in remarks published in New York magazine, as a "mono-maniacal" social climber and went on to accuse him of leaking information, which he denied.

This spat between two senior men revealed to the banking world that life was far from harmonious at the top of Lazards, and that there might be a succession problem looming.

But the clearest indication of the difficulty came in a row last year between Mr David-Weill and Mr Stern, who is married to Mr David-Weill's daughter, Beatrice. The article nevertheless names Mr Stern as still among the candidates for the top at Lazards.

In his interview, Mr David-Weill denies French newspaper reports that he had a blazing row with Mr Stern, who announced he was quitting and was allegedly told by his father-in-law to go ahead and do it.

"We had a conversation about his future, which went very well. And then he told me on the telephone, no fight at all, that for the time being he preferred concentrating on investments," Mr David-Weill says.

Vanity Fair suggests the root of the argument is that Mr Stern threatened to leave if he was not put in control. But the problem for Mr David-Weill, says the article, is that Mr Stern's abusive manner and his arrogance have "continually upset the fragile ecosystem at Lazards". Mr Stern is nevertheless still working in the Lazards group.

Mr David-Weill, 64, was the man behind the resurgence of the family bank. He brought the London, Paris and New York arms of Lazard together again in 1984 for the first time since the war, through the purchase of half the London operation from Pearson. Since then, the group has outshone the rival family dynasty of Rothschild.