- PJT is combining with Blackstone's merger advisory businesses
- Ex-Morgan Stanley dealmaker will have 8.1% economic interest
Paul J. Taubman’s stake in PJT Partners Inc. is valued at $82.5 million, less than three years after he started the company.
Taubman has 2.75 million partnership units, some of which vest as late as 2019, that are convertible to stock on a one-for-one basis, according to a Sept. 2 filing. The shares were valued at $30 apiece at 10:52 a.m. Tuesday in New York trading. That gives the company a $1.18 billion market capitalization.
The former Morgan Stanley banker jump-started growth at PJT by agreeing to combine the firm with the merger-advisory business being spun off by Blackstone Group LP. That diluted Taubman’s ownership, giving him an 8.1 percent economic interest in New York-based PJT, which trails the share that Evercore Partners Inc.’s Roger Altman and Moelis & Co.’s Ken Moelis had when their firms went public.
“People are scrambling to figure out what the right ownership model should be” of the investment banks that go public after the financial crisis, David Wessels, an adjunct professor at University of Pennsylvania’s Wharton School, said by phone.
Blackstone Chief Executive Officer Stephen Schwarzman is the largest PJT investor, with a stake of $174 million, based on 1.2 million shares and 4.6 million partnership units. He is spinning off the advisory business to reduce conflicts with Blackstone’s money management operations.
Investors in the private-equity firm will have some of their stake exchanged for PJT stock on Oct. 1, the date that “regular way” trading will begin on the New York Stock Exchange. People have already begun speculating on the value of PJT stock in a market that opened ahead of the swap.
Moelis, whose company debuted last year, kept the greatest interest among boutique advisory firms that went public in the past decade, owning 35 percent, before the initial public offering.
Taubman will keep 31 percent of his company’s voting rights, compared with the more than 90 percent that Moelis had. Altman controlled at least 30 percent of the votes prior to the offering.
The value of Taubman’s stake at the public offering is a fraction of Moelis’s when his firm offered shares. Ken Moelis held more than $400 million at the time, which included shares held in a trust for his family. He founded the company in 2007.
Former Morgan Stanley banker Robert Greenhill owned more than 25 percent of Greenhill & Co. when he took it public in 2004, eight years after founding the company. His stake was valued at more than $135 million at the IPO price. The shares more than quadrupled by the end of 2009, benefiting the founder as he sold more than $300 million of his stake in a five-year period.
Taubman founded PJT after spending three decades at Morgan Stanley, announcing his departure in 2012 amid a leadership struggle. He hired top dealmakers, such as former Morgan Stanley Latin America head Christopher Harland, and managing directors from JPMorgan Chase & Co., UBS Group AG and Citigroup Inc.
The net loss of the combined Taubman and Blackstone entities would have been $19.2 million in 2014, on revenue of about $401 million, according to the document.
PJT advised Verizon Communications Inc.’s $130 billion takeover of Vodafone Group Plc’s stake in Verizon Wireless last year. The firm has been hired by the Pittsburgh Penguins, the National Hockey League team exploring a sale, and the Weather Channel, which is partially owned by Blackstone.
Taubman was among Morgan Stanley’s top executives before leaving the firm in 2012. His reported pay that year and in 2011 was $9.93 million and $12.6 million, respectively, according to a proxy filing.