Donaldson, Lufkin & Jenrette

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Donaldson, Lufkin & Jenrette
Corporation
Industry Investment services
Fate Acquired
Successor Credit Suisse First Boston (later Credit Suisse)
Founded 1959
Defunct 2001
Headquarters New York, New York, U.S.
Products Financial Services
Investment Banking

Donaldson, Lufkin & Jenrette or DLJ was a U.S. investment bank founded by William H. Donaldson, Richard Jenrette and Dan Lufkin in 1959. Its businesses included securities underwriting; sales and trading; investment and merchant banking; financial advisory services; investment research; venture capital; correspondent brokerage services; online, interactive brokerage services; and asset management.

The firm was headquartered at 277 Park Avenue in New York, New York and employed about 11,300 people as of July 2000. Donald, Lufkin & Jenrette was acquired in August 2000.

DLJ lives on as an acronym used by the acquiring company and its spin-off for several business units offering specialized financial services.

DLJ, (which was majority owned by The Equitable (now known as (AXA Financial), announced on August 30, 2002 that it was being acquired by Credit Suisse First Boston for $11.5 Billion.[1]

Credit Suisse continues to use the DLJ acronym for certain business units, in areas such as private equity, real estate capital, and merchant banking. DLJ Merchant Banking Partners, a private equity firm that focuses on leveraged buyouts, was spun off from Credit Suisse in March 2014. It continues to use the DLJ acronym.[2]

History[edit]

Donaldson, Lufkin and Jenrette founded the firm on the principle that no one else on Wall Street was doing high quality independent corporate research. They centered the firm around this notion and became extremely profitable. As research became more of a commodity throughout the 1980s and 1990s they had since expanded into other businesses. One of them was a dominance in high yield fixed income securities, including a large number of junk bond deals. A major factor in DLJ's underwriting and trading success with these securities was facilitated by experts recruited from Drexel Burnham Lambert, during Drexel's decline in the late 1980s and its bankruptcy in 1990.

By 1997, the firm was ranked first in junk-bond underwriting (up from seventh in 1990).

Donaldson, Lufkin and Jenrette Securities, however, was not limited to junk-bonds. From 1990 to 1997, it grew substantially in the stock underwriting business, rising from 20th to 4th highest volume in the United States. And in the profitable business of advising corporations in acquisitions, DLJ ranked seventh in 1997.

Though never considered a powerhouse investment bank like old-line Wall Street giants as Goldman Sachs and J.P. Morgan & Co., DLJ generated $3.49 Billion in revenues with net income of $291 Million in Fiscal Year 1996. This performance, in turn, pushed up the price of the stock of its majority owner, The Equitable.

According to Barron's (newspaper), "In many ways, the Donaldson Lufkin & Jenrette saga is the classic tale of David beating Goliath." By all measures but one (junk bonds), DLJ had significantly less capital, offices and personnel that its competitors. Yet it was aggressive in acquiring new clients, doing deals and making lots of money. DLJ was termed the "new Drexel."[3]

Historical DLJdirect logo used from the 1990s for the firm's online brokerage business

DLJ's online brokerage business was first called the Personal Computer Financial Network (PCFN). It was renamed DLJDirect in 1997 and spun off from DLJ in 1999. Following DLJ's 2000 acquisition by Credit Suisse, DLJDirect was renamed CSFBDirect. CSFBDirect was renamed HarrisDirect after being sold to the Bank of Montreal in 2002 and was eventually re-sold to E-Trade in early 2006. The Pershing Division of DLJ (Harris) remained until being sold to the Bank of New York in 2003.

Credit Suisse First Boston's acquisition of DLJ closed in November 2000 with a purchase price of approximately $11.5 billion. Credit Suisse still uses the DLJ brand for its private equity operations, including DLJ Real Estate Capital Partners. DLJ Investment Partners and DLJ Merchant Banking Partners both spun off as separate companies in 2013 and 2014 (respectively), yet both retain the 'DLJ' in their corporate names.[4]

Notable Alumni[edit]

  • Stephen A. Schwarzman—Chairman and CEO of the Blackstone Group.
  • Safra A. Catz — CEO of Oracle Corporation.
  • Joel Cohen — Co-Founder of Sagent Advisors.
  • Navid Mahmoodzadegan — Managing Director and Founding Partner of Moelis & Co..
  • Gideon Yu — President & Co-Owner of the San Francisco 49ers and former CFO of Facebook and YouTube.
  • Scott Turicchi — President of J2 Global.
  • James Momtazee — Member & Head of Healthcare Industry Team KKR.
  • Susan Decker — Former president of Yahoo! Inc.
  • William H. Donaldson — Former chairman of the U.S. Securities and Exchange Commission (SEC).
  • Rich Riley, Senior Vice President & Managing Director of Yahoo! EMEA
  • Bennett Goodman — Founder of hedge fund GSO Capital Partners.
  • Henry Jackson — Founder of OpCapita.
  • Hamilton James — President and COO of The Blackstone Group.
  • Douglas Kahn — Former President and CEO of Croscill Home Fashions; Current CEO of MISTDODA Capital
  • Ken Moelis — Former UBS Investment Bank executive and founder of Moelis & Co.
  • Herald Ritch — Co-Founder of Sagent Advisors.
  • Daniel Scotto — Former Director of Research at Bear Stearns, DLJ, Rothschild, and S&P, Institutional Investor ranked First Team Nine Years in a row and the Top U.S. Bond Analyst while at Bear Stearns, Financial Analyst, President & CIO of Whitehall Financial Advisors LLC.
  • Wayne Van Dyck — Founder & CEO of Six Degrees Media, Inc., the creators of Smart Money Websites.
  • Mary DeLuca - Founder & President of Preferred Resume Group, LLC
  • Scott Aschoff - Chief Operations Officer Janney Montgomery Scott LLC
  • Alain O'Hayon - Managing Executive Partner, Dominick & Dominick LLC
  • Franck Ceddaha - Managing Partner at Oddo Corporate Finance in Paris
  • David Einhorn - Founder and President of Greenlight Capital
  • Jerry L. Johnson — Managing Director of RLJ Equity Partners.
  • Alan Richman - Founder and President of InnoVative Capital LLC
  • George Ball - Founder and Chairman of Philpott Ball & Werner, Inc.
  • Michael J. Campbell - CEO and President Dominick & Dominick LLC,
  • James Neissa - Co-Head Investment Bank (UBS)
  • Jamie Dinan - Founder and Chairman of York Capital Management, LP.
  • Joseph H. Reich - Co-Founder Reich & Tang
  • Warren Woo — Managing Director of Monroe Capital.
  • Paul Singer - Founder and CEO of Elliott Management Corporation and The Paul E. Singer Foundation
  • Ted Shen - Composer/lyricist and arts philanthropist, former Chairman of the DLJ Capital Markets Group (1984-1999)[5]
  • George Sykes - Founding partner and Portfolio Manager of GS Gamma

See also[edit]


References[edit]

  1. ^ Press Release (August 30, 2000). "Credit Suisse Buys DLJ for $11.5B". ABC News. Retrieved October 7, 2014. 
  2. ^ Press Release (March 31, 2014). "DLJ Merchant Banking Partners Spins Off from Credit Suisse". PRNewswire. Retrieved October 7, 2014. 
  3. ^ Jacqueline Doherty (September 8, 1997). "The New Drexel". Barrons. Retrieved October 7, 2014. 
  4. ^ Press Release (March 31, 2014). "DLJ Merchant Banking Partners Spins Off from Credit Suisse". PRNewsire. Retrieved October 7, 2014. 
  5. ^ http://www.playbill.com/news/article/156571-A-Second-Chance-Ted-Shens-Musical-Romance-for-Two-Premieres-in-VA-Brian-Diane-Sutherland-Star

Further reading[edit]

  • Rolfe, John; Peter Troob (2000). Monkey Business: Swinging Through the Wall Street Jungle. New York: Warner Books. ISBN 0-446-52556-1. 
  • Vault Reports (1999). Donaldson, Lufkin & Jenrette. New York: Vault Reports. ISBN 1-58131-016-1. 
  • Wet Feet Press (1998). Donaldson, Lufkin & Jenrette, Inc.: Cash and Culture. San Francisco, CA: Wet Feet Press. ISBN 1-58207-016-4. 
  • Jenrette, Richard H; John S Chalsty (1989). Donaldson, Lufkin & Jenrette Collection of Americana. New York: Donaldson, Lufkin & Jenrette. 
  • Jenrette, Richard H (1997). Jenrette: The Contrarian Manager. New York: McGraw-Hill. ISBN 0-07-032935-4. 

External links[edit]