Junk bond king Michael Milken looms large in LA finance industry – Los Angeles Times

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At Drexel, deals were more complicated and more exciting, he said.

The firm helped finance such blockbuster deals as the 1985 hostile takeover of cosmetics company Revlon and the 1988 takeover of tobacco and food giant RJR Nabisco, a $25-billion deal that was the biggest leveraged buyout of its era.

Demand for Drexel’s services was huge, and former bankers and traders there say the constant flow of business gave them insight and experience that proved invaluable later on.

“We were seeing eight times the amount of deals as our next closest competitor,” said Jess Ravich, a former Drexel bond trader who’s now a managing director at downtown L.A. investment firm TCW. “So you get there at age 26, and by the time you’re 30 you have the equivalent of 32 years of experience.”

More than anything, though, working at Drexel was a chance to learn from Milken. Regarded by some as a Wall Street villain, Milken is still seen as a role model by many of his former colleagues. They used words like visionary, revolutionary and even heretic to describe him. They recall his famously long hours — and how he used them to test an employee’s mettle.

“Mike would rarely refuse a meeting, even with the most junior person on the floor, but he’d make you play chicken a little bit,” Ravich said. “He’d say, ‘I have a meeting at 5 a.m. and a meeting at 4:30, but I can meet at 4.’ If you came in early enough, he’d meet with you.”

Eight months after Milken resigned, Drexel filed for bankruptcy on Feb. 13, 1990, dogged by the insider-trading investigation and crippled by a downturn in the junk-bond market. Fired employees started looking for work, which wasn’t easy because some Wall Street firms wouldn’t hire them — not because they’d done anything wrong themselves, but because of their association with Drexel.

A handful of Drexel bankers — including Moelis, Danhakl and Nolan — went to the Los Angeles office of investment bank Donaldson Lufkin & Jenrette. A few others, including Ravich, went to investment bank Jefferies, then headquartered in L.A.

Some thought they could do better as investors and started or joined private equity firms in Los Angeles. Those who went that route, such as Sokoloff of Leonard Green & Partners, had relationships with Drexel clients that helped them scale up. The firm would later do a few deals with Foodmaker Inc., a San Diego company that had previously been financed by Drexel.

In the years since Drexel went bust, firms run or founded by members of its diaspora have grown, been bought and sold, gone public and, in some cases, met the same fate as Drexel.

Ares Management, the largest local firm that traces its roots to Drexel, went public in 2014, making founder and Drexel alumni Ressler a billionaire. On the other side of the ledger, former Drexel bond dealer Gary Winnick went on to found Global Crossing, a telecommunications firm that in 2002 became one of the biggest U.S. firms ever to go bankrupt.

Successful or not, many of Milken’s acolytes will gather at this week’s conference, the marquee event put on by the Milken Institute, a Santa Monica think tank endowed by Milken and his brother Lowell, who also worked at Drexel.

Milken, 69, is worth an estimated $2.5 billion despite paying $200 million in fines and hundreds of millions more in civil settlements related to his tenure at Drexel.

He has spent much of the last 25 years funding cancer research — he was diagnosed with prostate cancer, now in remission, shortly after serving 22 months in federal prison — and doing other philanthropic work.

One event that’s not on the conference agenda is a dinner for Drexel alumni. It’s equal parts class reunion, networking session and homage to both the man and the firm that so many financiers in Los Angeles say have been key to their careers.

At the dinner, there are speeches and videos of old Drexel ads, war stories are told and friendships rekindled. But mostly, it’s a chance to see Milken, who remains beloved by those who worked with him.

“If Mike asked me for anything, I’d do it,” said Leonard Green’s Danhakl. “I tell people, we all still work for Mike. He used to pay us.”


Twitter: @jrkoren

Drexel connections

A sample of L.A. financial firms with ties to Michael Milken and Drexel Burnham Lambert

Ares Management

Headquarters: Century City

Specialty: Buyouts and business lending

Drexel connection: Founded by Drexel alumni Antony Ressler and John Kissick

Trivia: Ressler is majority owner of the Atlanta Hawks and is married to actress Jami Gertz. A charter school south of downtown L.A. is named Gertz-Ressler High School in recognition of their financial support.

Crescent Capital

Headquarters: West L.A.

Specialty: Private lending, high-yield bond investing

Drexel connection: Founded by Drexel alumni Mark Attanasio, Jean-Marc Chapus and Robert Beyer

Trivia: Attanasio is the majority owner of the Milwaukee Brewers and brother of screenwriter Paul Attanasio.


Headquarters: Downtown L.A.

Specialty: Bond investments, private equity

Drexel connection: Drexel alumnus Jess Ravich is the managing director overseeing TCW’s private equity and other alternative investments; Robert Beyer, co-founder of Crescent Capital, was TCW’s chief executive from 2005 to 2009

Trivia: Ravich founded and later sold securities firm Libra Investments; Beyer now runs private investment firm Chaparal Investments.

Leonard Green & Partners

Headquarters: West L.A.

Specialty: Private equity investments, particularly in the retail and restaurant industry

Drexel connection: Longtime managing directors Jonathan Sokoloff and John Danhakl worked at Drexel, as did advisor Peter Nolan. The firm’s namesake founder was a Drexel client.

Trivia: The firm’s current investments include Shake Shack, J. Crew, Lucky Brand. Past ones include Petco, Neiman Marcus and Del Taco.

Moelis & Co.

Headquarters: New York (with L.A. office in Century City)

Specialty: Investment banking

Drexel connection: Founded in 2007 by former Drexel investment banker Ken Moelis

Trivia: Though the firm is based in New York, Moelis lives and works in Los Angeles.

Turner Impact Capital

Headquarters: Santa Monica

Specialty: Investing in affordable housing, charter schools and healthcare facilities

Drexel connection: Founded by Bobby Turner, a former Drexel investment banker

Junk bond king Michael Milken looms large in LA finance industry – Los Angeles Times}