The deal does more than plug a hole in the investment bank’s business model. It also brings home several ex-Lehmanites who left under strained circumstances before alighting at Neuberger.
Neuberger CEO Jeff Lane resigned from what was then Shearson Lehman Hutton in December 1989 after being demoted as part of a reorganization that made his new boss -- current Lehman CEO Dick Fuld -- the leading candidate to become Shearson’s next president. Bob Matza, Neuberger’s COO, left Lehman in the summer of 1996 after being replaced as CFO by former Morgan Stanley treasurer Brad Hintz, who now analyzes securities and asset management firms for Sanford C. Bernstein.
That move was part of another reorganization, this time related to a failed power grab by Lehman’s then-president Chris Pettit, who died a few months later in a snowmobile accident. And Neuberger CIO Jack Rivkin is credited with resurrecting Lehman’s equity research department from abysmal depths in the late 1980s and early ‘90s -- a turnaround that became the subject of a Harvard Business School case study. Rivkin rose to head the firm’s equity business but was pushed out in 1992 after clashing with Fuld and Pettit.
Will these people all be able to get along now? Lehman intends to allow Neuberger autonomy, as an independent subsidiary, which should go a long way toward minimizing tension. But time also appears to have healed old wounds. “It felt good to be back,” says Rivkin, describing a get-acquainted visit he made to his old firm’s trading floor last month.
Among those he caught up with: David Porcelli, an equities executive at Lehman who was part of the first training class Rivkin oversaw when he ran the equity business.
“There are a lot of folks there that I know, and I have some warm feelings about them,” says Rivkin.
