Kenneth Moelis owns an apartment at New York’s Plaza Hotel, a 15,249-square-foot mansion in Beverly Hills and an investment bank that’s going to make him very rich later this month.
When Moelis & Co. (MC) sells shares to the public, the merger advisory firm’s founder will own stock worth about $386 million with another $100 million in trust for his family, according to a filing. Robert Greenhill, who started a rival firm, has built a net worth of at least $550 million since his firm went public a decade ago, data compiled by Bloomberg show.
While it’s not quite WhatsApp Inc. wealth, the fortunes show why top bankers leave Wall Street’s biggest firms to advise companies on their own. Moelis, 55, who worked for Carl Icahn, Donald Trump and Steve Wynn, is seeking a valuation as high as $1.58 billion for the firm he started seven years ago after leaving UBS AG. The initial public offering probably will be priced later this month.
“It’s only a tiny percentage of bankers who get to the boutiques and a tiny percentage who get to the level where their name’s on the door,” said Richard Lipstein, managing director of New York-based recruiting firm Gilbert Tweed International.
Companies pay the bankers for advice on mergers and acquisitions, with fees sometimes topping $10 million for a single deal. With just 317 bankers, Moelis & Co. took in $411.4 million of revenue in 2013. It advised HJ Heinz Co. on its $28.8 billion takeover by a group including Warren Buffett’s Berkshire Hathaway Inc.
The value of Kenneth Moelis’s holdings is based on the $29 a share price at the high end of the range specified in his firm’s prospectus. Navid Mahmoodzadegan, who quit his job as a media banker at UBS to join Moelis in 2007, has stock worth $119.2 million at that price.
By contrast, Greenhill & Co.’s revenue last year was $287 million. The wealth figure for Robert Greenhill, 77, doesn’t include his stake in the firm’s private-equity funds.
Roger Altman, 67, the former Blackstone Group LP banker who helped found Evercore Partners Inc., has accumulated a net worth of at least $130 million since his firm went public in 2006, the data show. He started his company after serving as a deputy Treasury secretary in the Clinton administration.
In addition to the money, Moelis and his peers have some perks. They all fly on private planes. Moelis, who bought a condo at the Plaza for $11.3 million in 2007, is reimbursed by his company for costs he would have incurred had he stayed in hotels when he’s in New York, where his firm is based.
The advisory business isn’t the most lucrative in Wall Street’s hierarchy. Hedge-fund manager John Paulson, 58, is worth $12.6 billion, according to the Bloomberg Billionaires Index.
Spokesmen for Moelis and Greenhill declined to comment. Dana Gorman, a spokesman for Evercore, didn’t respond to messages seeking comment.