In 2001, tired of the traditional investment banking grind, Noah Gottdiener opened Stone Ridge Partners, a boutique to service middle-market companies (valued at $25 million to $250 million). Following last month’s merger of Stone Ridge with Chicago-based Duff & Phelps, Gottdiener, 45, remains focused on the middle market, but he’s stretching his definition of boutique.
“Stone Ridge was just a handful of people,” notes Gottdiener, who has taken over as CEO of the (slightly) enlarged Duff & Phelps. “Now we’re the New York investment banking arm of a firm with more than 100 people in Chicago, New York, Los Angeles, San Francisco and Seattle. It has a national scope, an infrastructure and a history that you won’t find in other middle-market boutiques.” Gottdiener spent 19 years at Lehman Brothers, Furman Selz and Thomas Weisel Partners before starting Stone Ridge.
The Duff & Phelps takeover was taxing. Established in 1932, the firm had been controlled since 2000 by Webster Financial Corp., a Waterbury, Connecticut, bank holding company. Gottdiener says he began working on the deal two years ago when the $14.6 billion-in-assets Webster was beginning to pull back and concentrate on banking and investment services in its home region. Though Duff & Phelps’s price was not disclosed, Gottdiener couldn’t afford it by himself; he cobbled together the capital through a partnership that included Stone Ridge, private equity firm Lovell Minnick Partners and former Duff & Phelps CEO Chet Gougis, who stays on as president.
“Taking so long to pull the deal together had its benefits,” says Gottdiener. “This is very much a people business, and I had time to develop deep relationships with Chet and the rest of the team, which allows for a wonderful continuity.”
