After years of advising on some of the West Coast's biggest deals, Tech grad
Michael Tennenbaum starts his own investment firm.
After years of advising on some of the West Coast's biggest deals, Tech grad
Michael Tennenbaum starts his own investment firm.Tennenbaum, IE '58, a former senior managing director of Bear Stearns, started his company on July 1, specializing in equity investments in businesses, real estate and securities.
"I have always enjoyed special-situation investing, and Bear Stearns doesn't do that," Tennenbaum said. "I tried to persuade them to do a joint venture with me in that area, but they decided if they were going to do that, they would want to base it in New York." Tennenbaum, 60, who began his career on Wall Street after earning an MBA from Harvard, has lived in Los Angeles for the past 20 years. He said an "entrepreneurial impulse" motivated his decision to begin his own firm.
"I've never been in business for myself, and if I'm ever going to do it, I'd better get started," he said. "The flexibility of creating something in your own vision is the exciting part. I had a great amount of latitude in everything that I did at Bear Stearns. I had a taste of it, but to have complete flexibility is a lot more fun."
Tennenbaum's company concentrates on two market segments: transactions under $100 million and those that exceed $1 billion.
"Transactions under $100 million have less competition with the big funds that are around, and transactions over $1 billion usually require formation of an investor group; it's not usually just one investor," Tennenbaum explained. "We might as well help form the group as anybody."
Tennenbaum lists high technology, along with fashion and motion picture and television production, among industries he will probably avoid.
"High technology is very hard to predict," Tennenbaum said. "Even Bill Gates, the most successful high-tech investor in the world, has said it's a precarious activity; someone is in the basement down the street trying to put you out of business. And the second most successful investor in the United States is Warren Buffet, and he doesn't invest in [high technology]."
As a senior executive with Bear Stearns, Tennenbaum was associated with some high-profile deals, including arranging financing for the MGM Grand Hotel, for the merger of Pacific Southwest Airlines into USAir, debt financing of Caesar's World, recapitalization and equity investment of Jenny Craig, and the sale of Wickes Companies. He was an adviser on the privatization of Blue Cross of California and chair of a blue-ribbon advisory committee for the mayor of Los Angeles.
Keith Comrie, city administrative officer for Los Angeles, commended Tennenbaum's work on the city's Special Advisory Committee on Fiscal Administration. "Michael chaired a panel of high-powered business leaders in a comprehensive review of the financial condition of our city," Comrie said. "The final product was an outstanding five-year fiscal blueprint. Within the plan are a variety of new ideas that will generate more than $200 million in efficiency savings."
Alan C. Greenberg, chairman of Bear Stearns, was head of risk arbitrage for the investment bank when he hired Tennenbaum as a commissioned salesman on Wall Street. Five years later, Tennenbaum became a general partner. He was vice chairman of investment banking at Bear Stearns from 1989 to 1992, and a senior managing director since.
"When Michael was a broker, he was one of the best; when he was an arbitrager, he was one of the best; when he was an investment banker, he was one of the best," Greenberg said. "He will be a very successful private investor."
Tennenbaum is a former member of the National Advisory Board, now the Georgia Tech Advisory Board, and the School of Industrial and Systems Engineering Advisory Board. The Tennenbaum Auditorium in the School of Industrial and Systems Engineering is named for him, and he has endowed the Tennenbaum Lecture Series, which brings prominent economists to campus.
A co-op student, Tennenbaum was a member of the Executive Round Table and served on the staffs of the Rambler (as managing editor), Technique and Engineer, and participated for five years in DramaTech.
He is a member of the national board of Boys & Girls Clubs and is a past director of United Way Western Region. He is chairman of Arizona City Development Corp., and a former chairman of Technology Park/Atlanta. He is a member of the California High Speed Ground Transportation Commission.