Bear’s Hail Mary Was Not Gary Parr’s Finest Moment
Thinking proactively on Wall Street is essential to success. Bear Stearns was not proactive, and apparently neither was Gary Parr, their rock star banker from Lazard Freres.
Bear’s final days were not his finest moment; too bad he was not reading this address last summer. The warning signs were there, and he might have been able to talk some sense into the Politburo at 383 Madison but he ended up scrambling and ended up throwing one deep. And, unlike Doug Flutie’s remarkable pass, this ball did not find its mark:
Bear Stearns sought rescue financing from Temasek of Singapore in the days before its sale to JPMorgan Chase but was rebuffed, underscoring the growing reluctance of sovereign wealth funds to make high-profile investments.
Temasek received the request for money late in the day Singapore time on March 14, the Friday of the weekend when the deal to sell Bear was brokered by the Federal Reserve and other US regulators, people familiar with the matter say.
Temasek, which is considered one of the few sovereign funds with the internal capability to vet complex transactions, declined for practical and political reasons.
Bear’s advisers at Lazard Freres told Temasek it needed to respond before Monday morning in New York, which would have made it hard to do any real due diligence. Temasek also feared that an investment in Bear could generate controversy given “how American” the bank was.
Temasek’s response to the Bear deal was mirrored by the response of sovereign wealth funds from the Middle East and Asia that were asked to provide capital for Wachovia – another US bank with a strong domestic orientation – but refused. Wachovia declined to comment. FT
Parr’s fees would have been much larger if he could have cut a deal earlier, and given his lousy advice, should have donated any fees to the guys in Bears mailroom.
Of course, Parr gets the last laugh. The stock of his employer, Lazard Ltd. (LAZ-NYSE) is doing just fine, given their variable cost structure in M&A and to a lesser extent, asset management. And no book of toxic subprime slime on the balance sheet, either.
Yes, he was busy, but he dropped the ball on Bear.
Not long ago Portfolio called him The Global Engineer in a glowing portrait, but if he cannot get the Sovereign Wealth Funds to put some money to work, and soon, I will be forced to pin a new moniker on him.
The Janitor
Because he will have a big mess to sweep up.
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Photo by Jessica Antoia
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Parr is no Flutie
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Temasek rebuffed late plea from Bear Stearns
Financial Times
The Global Engineer
Portfolio
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