Christine Harland is a director of Camden Writers.
The Last Tycoons: The Secret History of Lazard Frères & Co
By William D Cohan. Published by Doubleday, 2007
The Last Tycoons, a dramatic tale of high ambition, enormous wealth and Wall Street politics, is really three histories in one. The early history of Lazard Frères, from its founding by the three Lazard brothers as a New Orleans dry goods retailer in 1848 and the company's evolution into a banking firm in the late 1800s, constitutes the first section. In the second section, Cohan focuses his attention on a detailed biographical profile of Lazard's famous banker, Felix Rohaytn. The third and, arguably, the most compelling section takes us from the mid-1980s to the present. Cohan, who worked at Lazard for six years, is at his most eloquent and exciting when he talks about the last 20 years of the firm's history – the part that he can report first-hand. This section is truly an insider's account of a firm that was legendarily secretive.
Among the most powerful of firms, Lazard stands above the giants. The men who worked at Lazard had a mystique that overshadowed most other figures in the field. For more than a century, Lazard was awe-inspiring and considered to be the quintessential investment firm, albeit idiosyncratic, with a cache that accompanied its aristocratic European connections and rarified, ultra-rich clients. We are exposed to the infighting, egocentric leadership and lack of cohesion within the rank and file that eventually derailed Lazard.
The epic battle of the superstars is revealed as Cohan describes Lazard's most famous and influential banker, Felix Rohaytn. As a young boy in 1942, he fled Vichy France and the Nazis, and in the mid-1970s he brought New York City back from near bankruptcy. All the while, he was setting himself up as a major player in New York and Washington society, positioning himself to eventually become Bill Clinton's ambassador to France.
Rohaytn's mentor, André Meyer, a dominant force at Lazard, was ruthless, but Rohaytn managed to thrive under his rule, perhaps because he appreciated that Meyer always needed to feel that he was in full control. As Rohaytn told The New Yorker: "[Meyer] made it crystal clear to me that nothing in the firm, however small, happened without his approval, and that he expected both recognition and gratitude." He also understood the paradoxes. "[Meyer] could peel people and find their strengths and weaknesses … he destroyed a lot of people, but he could also be exceedingly generous. He made the fortune and the career of as many people as he destroyed – and sometimes they were the same people."
Rohaytn's star begins to fade as Steve Rattner comes into ascendancy. At the time a joke, quoted in New York Magazine, was circulating through the Lazard offices, probably started by Rattner: "What is the difference between God and Felix Rohaytn. Answer: God doesn't think he's Felix Rohaytn." Rattner went on to inherit Rohaytn's job as head banker.
Cohan goes on to describe chairman Michel David-Weill and his battle with Bruce Wasserstein, his chosen successor. The David-Weill family controlled Lazard for four generations and Michel himself presided over the firm from 1977 to 2005. When Michel was unable to solve the problems within the firm, Wasserstein, the current CEO, stepped in.
Cohan is witty and cynical and has done a masterful job of pulling together the hundreds of sources and interviews into a cohesive, incredibly detailed whole. The conversations he conducted provide a close look at the scheming and politics that pervaded this venerable investment house. This is a story of Wall Street, but it is also a more general story of those familiar human frailties – greed, power and lust. This corruption and mismanagement could have played out anywhere at any time: it just happened to be one of Wall Street's most legendary firms. There are plenty of love affairs, scandals and criminal investigations. Cohan also elucidates the reasons for Lazard's vast success, not least its early awareness of the importance of international finance and the interconnectedness of global finance centers.
The Last Tycoons is full of colourful characters, and one of those, covered in close detail, is Meyer's son-in-law, Édouard Stern. Stern, known to eat 70 pieces of sushi at one sitting and described as "a bully, as close to a being a monster as anyone can be", was hired by Meyer as a possible successor, then fired in 1997. In 2005, Stern was found shot to death, wearing a latex suit, in his apartment in Geneva. The culprit, it appears, was his mistress. Cohan gives us Stern in minute detail, as he does most of his characters, as thorough as any reference volume. Pictures would have been nice to complement the carefully drawn word portraits.
If you read and enjoyed Barbarians at the Gate and Liar's Poker, the two classics of Wall Street, you will like this book. At the end of the more than 700 pages, the reader has been both edified and entertained.