Dealmaker Magazine

Where the Deals Are

Thu, 12 Jun 2008 16:13:27 GMT

The Coda of Bob Greenhill
The legendary M&A heavyweight has spent the last decade attempting to imbue his firm with his encyclopedic deal know-how. It just might have worked.

Redistricting Interactive Map
The Financial District is in the midst of a wholesale transformation. We've mapped out some of the most emblematic shifts.

First Among Equals
In time for the Olympics, Beijing rolls out its luxury welcome mat.

Private Placement

Tue, 10 Jun 2008 22:04:17 GMT

It's one of the most critical yet unappreciated art forms when it comes to business lunches: the table arrangement. And Hassan El Garrahy, the general manager of Harry Cipriani, has perfected the art of the seating plan with the élan of a grandmaster.

"It's like a chess match," says El Garrahy, who has been with Harry Cipriani since it opened its gilded doors in 1985, on the ground floor of the Sherry-Netherland Hotel on Fifth Avenue in Midtown Manhattan. On any given day, he is faced with decisions that (almost literally) shape the way business is conducted. This is, after all, the dining room du jour for buyout barons, bankers and high-powered executives such as Bruce Wasserstein, Ron Perelman, Theodore J. Forstmann, Gene Pressman, Larry Silverstein, Harry Macklowe, Howard Lorber and Allen Grubman.

It's El Garrahy's job not only to remember names and résumés, but to stay abreast of industry happenings. "Say, for example, that Mr. X and Mr. Y are in the same business and are considering a buyout of the same company," he says. "We would never put X and Y next to each other."

All this attention to detail seems to have paid off: The lemon-hued, 130-seat room overflows with diners who think nothing of shelling out $35 for an appetizer of fried calamari or $28 for a chicken club.

There have been challenges along the way, to put it mildly: In 1999, New York's then–attorney general, Eliot Spitzer, filed a sexual-discrimination lawsuit against the Cipriani family for refusing to hire female servers. (The case was settled after the Ciprianis agreed to bring women onboard.) Then, last summer, Giuseppe Cipriani, CEO of Cipriani USA, and his father, Arrigo, admitted that they had deliberately filed false tax returns, and agreed to pay $10 million in restitution and penalties.

Yet none of this (not even a zero-star review in November 2007 from the New York Times) seems to have affected Cipriani's clientele. "We get everyone -- the most powerful, the most famous, the most infamous," El Garrahy says. "And when they come here, we completely disregard their titles or their preferences and treat them like they're at home."

Building Blocks

Tue, 10 Jun 2008 22:04:25 GMT

As a managing director at Lazard, George Bilicic was at the top of his game. After founding the firm's power-and-energy group in 2002 and negotiating such high-profile deals as the $45 billion buyout of TXU (led by Kohlberg, Kravis & Roberts and TPG Capital) and the $11.8 billion sale of KeySpan to U.K. power company National Grid, Bilicic wasn't looking to make any major changes. Change, however, found him.

After having maintained a relationship with him for more than a decade, KKR asked Bilicic to join its team as a managing director. He accepted, and, as of May, was named head of the firm's new infrastructure investing effort. A dedicated infrastructure fund is expected sometime by the end of this year.

"I was content in my role at Lazard and perfectly suited as an adviser," Bilicic, 44, says. "I had an ongoing dialogue with KKR about all the activity in the infrastructure area, but nothing noteworthy to speak of brought this change about. When I think about my career -- first as a lawyer, then a banker -- that transition required that I dramatically adjust my focus. This transition, from banking to private equity, should be more seamless."

In today's market, anyone who expects to be successful in the private-equity arena, even as a service provider, must have deep industry knowledge and a solid understanding of investing trends. "I've built a very long career in the energy and infrastructure area, and I've developed strong relationships," Bilicic says. "For years I've been advising firms on how to deploy capital in the infrastructure area."

Under Bilicic's direction, KKR will be investing in the physical assets that make up the backbone of the economy. Rather than investing in businesses exposed to commodity prices, the buyout firm will focus on investments in non-cyclical assets such as toll roads, bridges, cellphone towers and regulated gas pipelines. "There's just a staggering amount of investment needed right now in the U.S., but it's not just a U.S. phenomenon," Bilicic says. "As the economy continues to transform in places like China, Brazil and Russia, so does their need for more infrastructure. This should be a great third career for me."

Portland, Oregon

Tue, 10 Jun 2008 22:04:33 GMT

Between Bandon Dunes and the new Chambers Bay, the Pacific Northwest has become the dealmaking golfer's summertime version of Phoenix. If you don't already have business taking you out there, it can be very tempting to find some. And I have another stop to add to your itinerary, one that might actually let you get some work done: Pumpkin Ridge Golf Club, a.k.a. the Great Pumpkin. Located just 24 miles west of Portland, this unusual facility has both a championship-caliber private course and a top-notch public routing, meaning you can sneak in two rounds before anyone even notices you're gone.

Serious golf fans may remember Pumpkin's private Witch Hollow Course as the place where Tiger Woods won his third U.S. Amateur in 1996. The Bob Cupp design presents 7,017 yards of gorgeous, clever mayhem mandating the kind of decision-making that usually requires a conference call. Consider number 18, for example, a 545-yard puzzle encompassing two ravine crossings and a green that falls off quicker than the Nasdaq on a bad day.

The 6,839-yard, public-access Ghost Creek Course is another Cupp that runneth over with rugged, clean-cut fun as it whisks through forests, meanders through open meadows and curls around two lakes. Classical bunkers feature overhanging edges so pronounced they cast shadows, and a creek appears and disappears throughout the round like a specter. Number 17 proffers a great par-four of just over 300 yards with several landing areas protected by water and a tight two-tiered green.

These made-for-walking courses merge to create a single facility that exudes a luxurious but quintessentially open-minded Northwest spirit. Which is what doing business out here is all about.

Déjà Vu?

Tue, 10 Jun 2008 22:04:41 GMT

The first is The Last Campaign (Henry Holt and Co.), Thurston Clarke's account of Robert Kennedy's 82-day quest for the White House in 1968. An engrossing history on its own, the book is all the more compelling for the obvious parallels to today. Like Barack Obama, Kennedy made a lightning run from long shot to presumptive nominee based largely on his ability to inspire and tap into opposition to an unpopular war. Writes Clarke of a Kennedy foreign-policy speech, "Substitute 'Iraq' for 'Vietnam' and 'terrorist' for 'Communist,' and the speech becomes one that four decades later a presidential candidate could deliver verbatim."

But it's also interesting to note where the similarities to Obama end. In many ways, RFK was the far more radical candidate, and the degree to which he championed the causes of the poor and working class actually has more in common with the campaign of Hillary Clinton.

On a more personal level, Clarke's account of Kennedy's assassination on June 5 -- lying on the floor of the Ambassador Hotel, a bullet in his brain, the candidate asks, "Is everyone else all right?" -- is enough to bring tears to even a Republican's eyes.

RFK's younger brother, Teddy, is the Kennedy who will probably most come to mind while reading Ethan Canin's America America (Random House), as entertaining a political novel as we've seen since Primary Colors. Set mostly in 1972, America America is narrated by the young Corey Sifter, who maps the rise of a Kennedy-esque New York senator, Henry Bonwiller. "I'm doing this...for working people like your father and all the other fathers who send their boys to Southeast Asia for no reason anybody can explain to them," Bonwiller tells his young mistress. This is before her Chappaquiddick-like death ruins Bonwiller's career, frees Corey of his innocence and makes him complicit in a crime.

It's been almost two presidential terms since Canin's last novel, Carry Me Across the Water, wowed critics and readers, but with America America he proves it's been well worth the wait.

Out of the Dark

Tue, 10 Jun 2008 22:04:49 GMT

In the summer of 1990, Brandon Staglin, 18, had just finished his freshman year at Dartmouth College. But what should have been a carefree few months under the California sun weren't. A romance had just ended. At night, anxieties plagued him.

Then, one night, Brandon walked out of his family's Napa Valley house and wandered the streets for four sleepless days. When he finally showed up on a friend's doorstep, he was immediately checked into a hospital. Soon after, he was diagnosed with schizophrenia, a mental disorder characterized by disorganized thinking, auditory hallucinations and delusions that afflicts an estimated 1 percent of the world's population.

"The stigma associated with mental illness leads you to believe it could never happen to you," says Garen Staglin, Brandon's father. As owner of the top-shelf Staglin Family vineyard in Napa, the elder Staglin used his extensive contacts in the community to get his son the care he needed. He and his family then quickly began educating themselves to demystify schizophrenia. What they learned was sobering: There is no predictive test for schizophrenia, which is believed to be largely genetic. There is no cure. Despite the affliction's prevalence, schizophrenia research remains vastly underfunded -- a fact Staglin was determined to change.

"We had a friend who was a conductor," he explains. "He suggested we host a music festival on our property." So in 1995, Staglin hosted his inaugural event, the Music Festival for Mental Health, raising $65,000. Last year, 500 people attended the event, headlined by Gladys Knight, raising $4.2 million. To date, the annual gathering, which is underwritten by the Staglins, has raised $53 million for the cause.

Today Brandon, 36, Staglin's marketing director, is again basking in the sun as he prepares for his upcoming nuptials. Says his father, "Once we got Brandon on track, we had to decide whether we were going to run away from this problem or run toward it. We chose the latter."

Inspiration and Perspiration

Mon, 07 Jul 2008 17:23:54 GMT

At a Stanford Business School event in 1970, grad student Brook Byers listened to venture-capital pioneers Pitch Johnson and Bill Draper discuss the firm they had founded in 1962. Byers, who would go on to become one of the founding partners of the famed VC shop Kleiner Perkins Caufield & Byers, was smitten. After graduation, he took a job with a semiconductor company but dreamed of getting into the VC field, which united his two passions: science and business.

By 1972, Johnson had struck out on his own, and he needed some help. Through a mutual friend he learned about Byers's interest, and soon hired him. Two years into Byers' apprenticeship, Johnson had him look at a deal brought by friend Tom Perkins, a start up called Tandem Computers. Byers urged Johnson to invest. It was one of several big successes the two had working together and a fortuitous relationship for Byers. A few years later, he joined Perkins and Eugene Kleiner in raising institutional money and launching their outfit. Johnson preferred a smaller firm investing primarily family money and went on to do star deals such as seeding the biotech juggernaut Amgen. Byers and KPCB went on to their own successes. Nevertheless, Johnson has continued to do deals with Byers over the last 30 years.

Johnson: [Byers] had energy, brains and honesty. That was the most important thing. He didn't mislead. That was a quality of the venture-capital business at the time. I don't think he liked it then, but I threw him into the pool and let him swim. He didn't know the business, but he had a good nose for people and markets. He did a lot of work on the companies he got interested in. He built our reputation for doing more than others.

Byers: The patience he showed over five years was remarkable -- to include me in most meetings, decisions and trips so I could absorb his analytical methods and leadership style. He taught me a methodical process for constructing the components of a fast-growing technology company, for managing risks and for building teams. He definitely "mentored by doing," and encouraged me to back my investment recommendations with what little personal funds I had at the time. He also had humility; he taught me to respect the entrepreneurs, who are the real risk takers and innovators.

Johnson: I was the son of a track-and-field coach and an English teacher, so I grew up with the idea of teaching others. I gave him an environment to do the work and then come talk to me about it. I'd nudge him a little here and there; he always accepted my comments. Through working with Brook, I developed a lot of ideas for my Stanford course [the first venture-capital course taught in a U.S. business school]. You need some sense, but there is training you can do to become a good venture capitalist.

Byers: Pitch has inspired me for 36 years. When it came time for me to leave, he was philosophical about it and said, "We'll always be professional and personal friends." He was so right.

Audrey Up, the Rocket Down

Tue, 10 Jun 2008 22:06:15 GMT

Pelle Holmberg

Former wine specialist for Christie's; now cellar acquisitions director for wine retailer Vinfolio.com.

Buy: Rhone Valley Wines From 2006
These wonderful, ripe and lush vintages offer plenty of good opportunities for early drinking. Despite the low exchange rate for the dollar, there's still value to be had here.

Hold: 1990 Dom Pérignon and Cristal
These wines will continue to improve in the bottle. With prices climbing and, as I see it, only going higher, let them keep collecting dust in your cellar.

Sell: U.S. Pinot Noir
Became so popular after Sideways that many new producers started making pinot. Unless you plan to drink them, don't buy them. There's virtually no demand in the secondary market for these early drinkers.

Todd Levin

Private art adviser to a select number of high-net-worth collectors; director of Levin Art Group.

Buy: Rosemarie Trockel, Jenny Holzer, Barbara Kruger, Cindy Sherman, Sarah Lucas
Major works by each are still available for under $300,000. Significant appreciation is possible if you buy knowledgably.

Hold: Agnes Martin, Yayoi Kusama, Roni Horn
Major early works will set you back $1 million each, but those pieces will steadily appreciate. That's a high entry barrier, but hold 'em if you’ve got 'em.

Sell: Lisa Yuskavage, Cecily Brown, Elizabeth Peyton
Paintings by all three are already selling in excess of $1 million at auction. Relative to the historical importance of these artists, such prices are ridiculous.

Peter Siegel

President of Gotta Have It Collectibles, the leading high-end memorabilia gallery in New York.

Buy: Audrey Hepburn
Signed items have escalated between 200 and 300 percent in the last year because of a surge in her popularity, especially among young people. She's also got international appeal. Buy now.

Hold: Classic Rockers
There's major scarcity for signed items from the Doors, Led Zeppelin and Jimi Hendrix, the three most sought-after rockers. An album cover signed by the Doors' original four members would sell for $15,000.

Sell: Roger Clemens
Limited-edition signed jerseys that sold last year for $750 are now worth $295. Many sellers are trying to dump Clemens at less than 50 cents on the dollar. My advice: Cut your losses now.

A Bear's Lair

Tue, 10 Jun 2008 22:06:24 GMT

Last February, less than a month before the firm's mortgage-related problems forced it to accept a JPMorgan–led bailout, Bear's 74-year-old chairman spent nearly $28 million on two Plaza apartments -- which he paid for in cash.

Cayne and his wife, Patricia, originally bought a one-bedroom, 782-square-foot apartment for $2.4 million on the fourteenth floor of the newly renovated Plaza, the historic 1907 hotel on Central Park South that now features 181 residential apartments, a small hotel and 152 luxury-hotel condos. Three weeks later, they bought a palatial 5,000-square-foot spread comprising two neighboring three-bedroom condos for $25.8 million. (Shortly after the outlay, Cayne freed up some cash by selling a chunk of his deflated Bear stock -- which plunged in value from $1 billion a year ago to $61 million at the time of his firm's sale.)

As soon as they sell their current co-op at 510 Park Avenue, the Caynes plan to move into the legendary hotel, where a Vanderbilt signed in as the first guest, Truman Capote threw his famous "Black and White Ball" in 1966 and a fictitious little girl named Eloise resides.

The Caynes' new pad boasts ornate moldings, hotel amenities such as room and turndown services and a touch screen connecting them to nearby restaurants and stores. The sprawling apartment suite also provides enough space for Cayne, a 12-time national bridge champion, to stage home tournaments, possibly with new neighbors such as developer Harry Macklowe, New England Patriots owner Bob Kraft and banking heavyweight Ken Moelis.

Should Cayne choose to flip his new properties, he wouldn't be alone; several Plaza units have already hit the resale market, including those purchased by Italian real-estate mogul Luigi Zunino; Pier Luigi Loro Piana, co-CEO of the eponymous luxury-goods business; and Fred G. Farago, president of American Fruits and Flavors.

Prime Choice

Tue, 10 Jun 2008 22:06:30 GMT

To the outside world, Del Frisco's Double Eagle Steak House in Midtown Manhattan is known as a carnivore's canteen, where every weeknight, the glass-wrapped dining room teems with festive young folks in pinstripe suits set loose from the office buildings surrounding it. But just steps below, in a former bank vault–turned–wine cellar, lies one of New York's best-kept secrets: Del Frisco's spectacular, wood-paneled private dining room.

With space for 80, the long rectangular chamber evokes a cellar theme with its rough stone floor, arched ceiling and soft, neutral lighting. These days the old vault's currency is in liquid form -- some 15,000 wine bottles displayed behind glass in cedar racks. The rarefied setting has proven a perfect spot for post-deal meals recently hosted by nearby investment banks JPMorgan Chase, Morgan Stanley and UBS.

What makes the steakhouse a prime choice for dealmakers looking for a unique venue? Its versatility. "Companies usually have sit-down dinners here," says Scott Gould, Del Frisco's general manager. "But sometimes they want to have a more casual event, like a walk-around, meet-and-greet wine tasting, and we can do that, too."

Tuna Tartare with Osetra Caviar
(with 1996 Pol Roger "Sir Winston Churchill" BRUT, Épernay)
Champagne and caviar -- Caspian Sea Osetra caviar, that is, which is increasingly rare and premium-priced -- may not be the most original starter for a bacchanal, but it's still tough to beat. Pair it with a bottle as fruity and complex as Pol Roger, and how can you go wrong?

Crab Cakes with Cajun Lobster Sauce
(with 2000 Chevalier-Montrachet "Clos des Chevalier" Domaine Jean Chartron)
Del Frisco's has a Cajun accent (one of the restaurant chain's founders is from Louisiana), but it's a mild one, in deference to fragile northern palates. The light lobster cream sauce here melds beautifully with the honeyed complexity of the esteemed white Burgundy.

Turtle Soup Del Frisco's
(with 2002 Williams Selyem "Allen Vineyard," Russian River Valley pinot noir)
Finding a terrapin-friendly wine would be a tall order -- and, in this case, an unnecessary one. Turtle Soup Del Frisco's is actually a concentrated beef broth spiked with a little white pepper. "It's a popular item for closing dinners, maybe because it's light," says Heather Lasnier, Del Frisco's catering manager. As for a mock-turtle wine, she suggests this plummy and smoky pinot noir from the California boutique winery Williams Selyem.

16-Ounce Bone-In Filet; Cold Water Australian Lobster Tail
(with 1998 Château Latour, Pauillac)
While sometimes scoffed at as a showy 1950s throwback, the classic surf-and-turf remains wildly popular -- particularly here, where the arranged marriage comes from two good pedigrees. Australian lobsters are superior, Gould says, because "the water is really cold year-round, which makes the meat firm and sweet." For the wine, he chooses one of the earthiest of Bordeaux's First Growths. It's still fruity enough, though, to complement the lobster.

Chocolate Soufflé Cake
(with 1977 Fonseca Vintage Port, Douro)
When velvety, bittersweet chocolate falls into the arms of a classic vintage port, it can make the lights dim. The 1977 from Fonseca, one of the oldest and most venerable port houses in Portugal, is ripe with flavors of figs, cherries, tobacco and chocolate.

Total food cost for 20: $7,004.75
Total wine cost: $8,165

del frisco's
double eagle
1221 ave of the americas
new york, new york 10020
(212) 575-5129
------------------------------------
may 05 '08 11:47pm
------------------------------------

20	tuna tartare	$15.95	$319.00
10	osetra	$375.00	$3750.00
20	crab cake	$19.95	$399.00
20	turtle soup	$8.95	$179.00
20	filet	$64.95	$1299.00
10	lobster	$167.95	$839.75
20	choc souffle	$10.95	$219.00
5	pol roger	$395.00	$1975.00
4	charton chev	$325.00	$1300.00
4	w. sel allen	$295.00	$1180.00
3	dunn 90 hm	$395.00	$1185.00
3	latour 88	$475.00	$1425.00
2	fonseca 77	$550.00	$1100.00

	subtotal		$15169.75
	tax 8.375%		$1270.47
	service 20%		$3033.95
	total due		$19474.17

thank you for choosing del frisco's

Like Clockwork

Tue, 10 Jun 2008 22:06:37 GMT

The well-traveled outsider looks at Zurich as either the most boring city in Western Europe, or as a place to reset one's soul amid a picturesque Alpine backdrop, a placid lake and the most famous bank vaults in the world. If you've got three hours between meetings, try this leisurely afternoon stroll. It's best conducted in summer, when the city’s street life comes alive.

11 a.m.
Zurich is one of the most pedestrian-friendly towns on a continent full of them, so tell your driver to take the afternoon off. Start your hike at the Hauptbahnhof, the city's main train station, where the trains do indeed run like clockwork -- and the clocks like the rhythms of the universe.

11:10 a.m.
Point yourself south toward Lake Zurich for a walk down the Bahnhofstrasse, the Fifth Avenue of wristwatches. If you feel a tingling under your feet, it might be because much of the gold held by the nation's banks purportedly rests below the pavement in vast underground chambers. All the big brands (Longines, Rolex, Omega) have flagships here, but your first stop ought to be at Chronometrie Beyer, founded in 1760. Downstairs in the basement resides perhaps the most comprehensive private collection of timepieces in the world (including an eighteenth-century clock in the shape of a pagoda, made for the Chinese emperor).

12:15 p.m.
Wind your new watch and make your way south to the Paradeplatz. It began its commercial life as a medieval pig market; today it's the financial nexus of the country, with UBS on one corner and Credit Suisse on the other.

12:45 p.m.
For lunch, I've always preferred the Zeughauskeller, a beer hall housed in an armory that dates from 1487. Admire the halberds that may well have been used to provide the Swiss banking industry with some of its first capital, and order the house specialty: baby beefsteaks wrapped around a sword, plus a stein of flaming beer. (They float liquor atop and set a match to it.) If you plan on doing work this afternoon, however, I'd suggest ordering just one.

1:30 p.m.
Whenever emerging from the keller, I always feel it's a good idea to get a little religion. Nearby is the Fraumunster, an ancient church whose spire rises high above the Paradeplatz. Make sure to check out the choir, adorned by soaring stained-glass windows that were designed by Chagall.

1:45 p.m.
With just a few minutes remaining before the afternoon shift begins, head down to the lakefront and the open esplanade of the Bürkiplatz. From this vantage point, the views extend across the yacht-strewn lake toward the serrated horns rising in the distance. It's a perfect spot to contemplate your place in the movement of the universe.

The File
Zurich
Hauptbahnhof
At Lowenstrasse and Bahnhofplatz

Chronometrie Beyer
Bahnhofstrasse 31
011-41-43-344-6363

Zeughauskeller
Bahnhofstrasse 28, at Paradeplatz
011-41-44-211-2690

Fraumunster
Fraumüsterstrasse at Borsenstrasse

Bürkiplatz
At the southern end of Bahnhofstrasse

Whale of A Time

Tue, 10 Jun 2008 22:06:44 GMT

Think of it as a flying paradox. You feel like you're the most important person in the world, except you're traveling with 500 others. You could swear you’re in a G5 fitted to the highest standard, except you're aboard a gigantic machine almost twice the size of a 747.

Welcome to the Flying Whale, also known as the Airbus A380. The reason you feel so special, though, is that the world's largest jetliner entered service with the one carrier that could provide a level of service commensurate with its bulk: Singapore Airlines.

The company's slogan for its A380 Suites service, "a class beyond first," might make you groan. But then you board via a dedicated lane and enter the splendid isolation of your own private cabin, complete with a pair of 35-inch-wide fine-grain leather seats and your own 23-inch widescreen LCD. You sip fine champagne while the sarong-clad attendant hangs your coat in your personal mini-wardrobe.

Last time you felt leather this soft was on Milan's Via della Spiga, and the mahogany finish looks just like what you always wanted for your Bentley. The takeoff is so quiet it's almost disconcerting.

Singapore is perhaps best at knowing what others do best.

It has enlisted Givenchy to design your cutlery, your jammies and the linen for your full-size foldout bed; Ferragamo to package up your toiletries; and several Michelin-starred chefs to prepare your meals. Were the airline ever to offer onboard wine tastings or book readings, you could probably count on Robert Parker and John Grisham to knock at your cabin door.

The only thing you share with the rest of the crowd in steerage is the entertainment system, with more than 1,000 selections of movies, TV shows, albums, video games and even language courses. And yes (at last!), there are power outlets for your laptop and iPod.

The A380 currently flies between Singapore and London, Sydney and Tokyo. It's due to begin U.S. service this fall for Emirates and Qantas. Both airlines certainly have their work cut out for them.

The File
Singapore Airlines A380 Suites Service
Shhh! Though four of the single suites combine into 54-inch beds, Singapore has repeatedly discouraged passengers from getting their Mile High Club wings.
Flights: Daily evening flights from Singapore to London, Sydney and Tokyo; returns three to five times a week from each locale.
Fares: From $6,500
For Reservations: 800-742- 3333
singaporeair.com

Power Up

Just because you're not lucky enough to have a seat on the Singapore Airlines A380 doesn't mean you have to spend your flight in terror that your ThinkPad might run out of juice. Thanks to the Inflight USB Power Unit adapter ($35), you can recharge all your electronic devices by plugging right into a standard armrest audio-headphone jack.
inflightpower.com

Everything In Its Right Place

Tue, 10 Jun 2008 22:06:54 GMT

In most of your life, you're probably pretty organized. (Working on a $1.2 billion merger with paper strewn willy-nilly around your office tends to make people nervous.) But when it comes to packing for a road trip, well, sometimes your inner college student comes out -- you mash your suits and shirts together in the same compartment, zip the whole thing up and simply hope things won't come out too jumbled on the other end.

In partnership with German Frers, a naval architecture and engineering firm known for designing sleek and efficient racing yachts, Valextra has crafted an elegant bag that falls apart on you -- intentionally. Unzip the Valextra–German Frers Trunk and, instead of a typical bag interior (one big space with a few buckled straps, basically a mess waiting to happen), you'll find a stack of nine removable pouches in various shapes and sizes, the better to save you from your occasionally disheveled self.

The Frers people conceived of this bag, made of technical waterproof material, as the ideal sailing companion. But while these compartments indeed allow you to keep your brine-spattered poncho safely away from the black socks for tomorrow's meeting, the trunk is also a lifeline in less action-oriented travel circumstances. The longest pouch will fit a light suit or a pair of trousers, and the two slightly smaller ones will take your shirts, leaving the four rectangular and two long/slim numbers for whatever underwear, toiletries and work-related gear you deem necessary.

Perhaps the best news, though: Even in the hands of the most technologically inept, it takes a mere 10 seconds to reassemble the bag, with the pouches slipping logically into their intended spaces. It's perfect, in other words, for sprinting for the airport -- or preparing to abandon ship.

The File
Valextra–German Frers Trunk
Well-Built German Frers has designed more than 700 yachts and superyachts, including two that raced in the America's Cup.
Price: $4,790 (large); $3,480 (small)
valextra.it

War on Dings

Not all gadgets are as impervious to the bumps and bounces of the road as the HTC Shift. For your more delicate precious devices, there's InvisibleShield by Zagg ($25), a military-grade protective film that keeps electronic devices scratch-free without compromising their look, feel or performance.
invisibleshield.com

Hello Dubai

Tue, 10 Jun 2008 22:07:01 GMT

To the list of astounding edifices in the Persian Gulf's answer to Wall Street and Las Vegas, you can now add the Raffles Dubai, a 19-story triangular homage to the Great Pyramids in Egypt (or is that to the Luxor on the Strip?). Situated as close as this city has to a center, Raffles has claimed the prize for the most sweeping views of the skyline’s ever-buzzing 24-hour-construction sites, at least until the soon-to-be-tallest building in the world, the Burj Dubai (looming outside the hotel’s western flank), is completed next fall.

The location has another advantage: less time spent fighting Dubai's newly legendary traffic getting to and from the airport and financial district, which are both just minutes away. That means more time for exploring the palm tree–shaped islands and schussing down the indoor ski slope.

Although the new hotel is a little kitschier than the typical Raffles offering, the architects have actually done an admirable job of interweaving the hieroglyphics, marble waterfalls and gilded mother of pearl with more classically Raffles design elements such as muted Chinese rosewood furniture and Oriental rugs. In a city where daytime summer temps can reach 120 degrees, the hotel has taken an important cue from its gaudiest Vegas counterparts in incorporating as many amenities under one air-conditioned roof as possible. On-site facilities include no fewer than 11 restaurants and bars, a 13,500-square-foot spa, a business center with 2,200 square feet of meeting space, plus the adjacent Wafi Mall (also shaped like a pyramid) with 300 stores, 30 restaurants, a virtual-reality park and indoor river.

While foodies may or may not warm to the liquid nitrogen–infused Chino-Latin fare in the Fire and Ice restaurant, the setting couldn't be more perfect for finishing whatever business has brought you to this remarkable crossroads. Afterward, head up to the China Moon Champagne Bar in the hotel's glass capstone. There, amid the plush red velvet furnishings and floor-to-ceiling windows, you can sip a $60 flute of Veuve and watch as this former desert village shimmers and swells like a mirage into the city of tomorrow.

The move into Dubai is just part of a major expansion of the Raffles brand since it was snapped up in 2005 by Colony Capital, the Los Angeles–based private-equity firm. Colony -- whose other interests include Station Casinos and Libya's Tamoil -- plans to have Raffles sprouting up in 10 new locations by 2012.

The File
Raffles Dubai
Face Time The hotel’s spa offers an Egyptian Gold facial, which actually makes use of 24-karat gold.
Rates From: 3,500 AED (about $1,000) per night
Number of Rooms: 248 (all of them suites)
For Reservations: 011-971-4324-8888
dubai.raffles.com

Unlimited Calling

There's no surer way to get someone from accounting on your case than to use the phone in your overseas hotel room for lengthy calls. And frankly, cellphones often aren't much better. But sign up for Rebtel, and when you reach your destination, use its service number for each connection, and every call will be billed at the local rate.
rebtel.com

Noise Redux

Tue, 10 Jun 2008 22:07:10 GMT

Remember the Sony Walkman? Natty belt clip, funky-smelling spongy orange headphones, Earth Wind & Fire cassette tape blasting away in your ears? Well, it's back, and you're going to want one -- and not just so you can show your kids what a dork you were in high school. The new, completely unrecognizable NWZ-S718 Walkman solves the very contemporary road-warrior dilemma of how to create an impervious bubble of high-fidelity sound around your weary head without having to pack (and remember to charge) two devices.

That's because the NWZ-S718 is like an MP3/video player with a pair of noise-canceling Bose headphones built right in. With the simple press of a button, this 8-GB monster can reduce up to 75 percent of ambient noise through the proprietary ear buds, both of which sport small microphones that automatically monitor your surroundings and adjust your bubble accordingly.

It gets better: The latest Walkman runs circles around the iPod Nano when it comes to audio quality, thanks to technologies such as Clear Bass boost, Clear Stereo processing and DSEE high-frequency restoration, as well as virtual surround sound.

Another area in which the NWZ-S718 outshines the competition is endurance. Expect a whopping 33 hours of listening time before having to find an outlet, or a very good eight hours when watching video. (Not that we'd recommend squinting at the small 1.8-inch color screen for long.) It doesn't sync with iTunes, but you can easily load tracks via Amazon's all-MP3 store. Throw in an FM tuner and an intuitive navigation pad, and you've got a first-class music player that will have you reminiscing fondly about tenth grade.

The File
Sony Walkman NWZ-S718
Like Yesterday The original Walkman went on sale in July 1979; the first CD Walkman launched in 1984.
Price: $199
sonystyle.com

The Wrist Treadmill

It's the time of year to say adios to the treadmill and stretch those legs on the open road. But that doesn't mean you can't track your progress. The Nike+ SportBand ($59) one-ups typical sports watches by monitoring distance, time, pace and calories burned. Upload it all to your computer to analyze your results and compare with fellow runners.
nike.com

First Among Equals

Tue, 10 Jun 2008 22:07:17 GMT

It's spectacular. It's efficient. It's the second-most sprawling building on the planet. But does it offer a good barolo? That's the question many first-class travelers seem to be asking about the new $3.5 billion Terminal 3 at Beijing Capital International Airport. Like the steel-mesh "Bird's Nest" Olympic stadium and the glowing blue "Water Cube" aquatics center, the swooping 10.6 million–square-foot glass-and-red-steel-sheathed structure has clearly been built to wow the throngs that will descend on the Chinese capital later this summer. The terminal's luggage system alone is a marvel, capable of handling 19,200 pieces an hour and delivering a suitcase from the belly of a jumbo jet to your fingertips in about four and a half minutes. The ability of the Chinese to master commerce on a grand scale, though, was never much in doubt. It's the finer points that sometimes trip them up.

That's why the Air China First Class Lounge is such a curiosity. As you ascend to the lounge, overlooking the vast main portion of the terminal, your first impression is...Huh. I guess it's OK. Beneath a cheery canopy of Ficus, semi-enclosed groupings of leather club chairs provide a relaxed setting for informal meetings and checking e-mail. A buffet stays well-stocked with tasty dumplings and congee (the popular Chinese porridge), and a sleek, glass-front bar has all the standard top-shelf spirits plus a wide selection of wine from Great Wall, the official vintner of the Beijing Olympics. Showers, sleeping rooms, massage chairs and a business center with faxes and spacious meeting rooms help fill out a complement of amenities comparable to those at any top European or Asian...business-class lounge.

But as is often the case in the world's most segmented classless society, impressions can be deceiving. Call ahead to reserve one of the lounge's two "VIP Rooms" ($405 an hour for the bigger, $135 for the smaller), and you'll spend your layover luxuriating like a senior Politburo official in an imperial throne room–style chamber of polished, golden-lit rosewood paneling and plush Oriental rugs, with a level of service far superior to what's available to the regular "first class" hoi polloi. Now that's more like it.

The File
Air China First Class Lounge, Beijing's Terminal 3
So, What's the Biggest? Only the 240-acre Aalsmeer Flower Auction building in the Netherlands has a larger footprint than Terminal 3.
Number of Daily Nonstop Flights from New York: 2 (one from JFK, one from Newark)
Contact: 011-86-4008-100-999
airchina.com.cn

Star Treatment

Ever wondered what it feels like to float through airports with the ease of royalty or a hip-hop star? Airport Assistance ($95–$600), available at more than 140 airports worldwide, will meet you at the curb, check your bags, access exclusive private airline clubs and fix whatever other troubles you might encounter on your way to the gate.
airportassistance.com

The Maxi Mini

Tue, 10 Jun 2008 22:07:24 GMT

They're the next big small thing. Designed as take-anywhere secondary PCs, low-cost mini-notebooks are increasingly nudging ThinkPads and MacBooks off laps (and aching shoulders and backs). But inside their cute, featherweight exteriors, not all of them necessarily have the guts of what a road warrior needs.

The HP Mini-Note PC does. It all starts with the full-size keyboard, which makes this 2.6- pound laptop ideal for taking notes in meetings or firing off longer e-mails on the go. The Mini-Note PC is also durable, thanks to its anodized aluminum shell, scratch-resistant display and a 3D accelerometer that automatically shuts down the hard drive in case of a fall. Even the keys themselves are built to last; a clear finish prevents the letters from rubbing out over time.

There's one other fundamental difference between HP's mini and the competition: You're not forced into a one-size-fits-all configuration. Outfit this micro machine with your choice of VIA processors (1 GHz to 1.6 GHz for more productivity punch), a solid-state drive (for faster performance) or a traditional hard drive (up to 160 GB, if you want to store a ton of photos and videos), plus one of three operating systems (Windows XP, Vista or SUSE Linux).

The 8.9-inch display is a bit small for extended computing sessions, but it's nice to know that you'd be able to keep working or playing even on a Japanese "pusher" train. When you get to the hotel, use the integrated Webcam to check in with the office or the missus. Just be sure to pick up the six-cell (not the three-cell) battery to avail yourself of the full good-though-still-not-fabulous 4.5 hours of battery life.

The File
HP Mini-Note PC
Intel expects the so-called “Netbook” market to explode to 50 million units by 2011.
Price: From $499
hp.com

Baby's Got Backup

The more computers you have, the more you need SugarSync (starting at $25 per year for 10 GB). This indispensable backup service with a twist magically keeps your files up to date online as well as on any Mac or Windows PC where you have it installed. You can even access your files from your BlackBerry or Windows Mobile phone. Sweet.
sugarsync.com

Philadelphia's Story

Tue, 10 Jun 2008 22:07:31 GMT

With its low-key personality and location halfway between New York and D.C., Philadelphia is often an obvious choice for convening over a meal. But where, exactly? High-end eateries multiply by the month, but only a select few hit the sweet spot where exceptional food, adequate privacy and the right setting for business meet.

Breakfast
Even if your day starts at dawn, Lacroix is ready for you. This sunlit space, hidden away on the second floor of the Rittenhouse Hotel, begins breakfast service at 6:30 a.m. seven days a week. Menu options include perfectly executed versions of standard morning fare: eggs Benedict, challah French toast and three choices of coffee roasts. Near-psychic servers know just when you need something and when to keep their distance. Unless you've reserved the cozy private dining room, request a seat by the soaring wall of windows overlooking Rittenhouse Square.

Lunch
Before its renovation in 2006, The Nineteen, on the top floor of the Park Hyatt at the Bellevue, was home to Founders Restaurant and Library Bar -- known citywide as the ideal restaurant at which to meet a mistress because of its dim lighting and extreme privacy. It's brighter now, and the seafood-heavy fare is better, but it's still among the city's most discreet meeting places, with generously spaced tables and a private room. The raw bar is a strong draw here, as is the 21-day-aged prime rib.

Dinner
Vetri may not seem the perfect setting to close a deal. But a reservation at this snug, inconspicuous, effortlessly hip restaurant conveys both influence and exquisite taste. Although you'll typically wait about two months for a prime reservation, you're guaranteed the kind of unforgettable meal that caused Mario Batali to call Vetri the best Italian restaurant on the East Coast. And here's an insider’s tip: Later is better. Make your reservation for 8:30 or even 9 p.m., and you'll find the noise level drops off appreciably. You'll then be able to linger over your silken foie gras and brown butter–kissed handmade pastas (and your negotiations) as long as you like.

The File
Lacroix
210 West Rittenhouse Square
215-546-9000
lacroixrestaurant.com

The Nineteen
200 South Broad Street
215-790-1919
hyatt.com/gallery/nineteen

Vetri
1312 Spruce Street
215-732-3478
vetriristorante.com

How Do You Say "Blow Up Like a Balloon"?

Ordering in a foreign language can be comical, but it loses its humor fast when communications about food allergies get lost in translation. That's why selectwisely.com has created strongly worded cards in more than 35 languages (just $9.50 for each language) that tell your servers exactly which ingredients you need to avoid.

The Ultimate CrackBerry

Tue, 10 Jun 2008 22:07:38 GMT

While other companies try to mimic the iPhone's touch screen, RIM continues to stick with what it knows best -- speed and keyboards -- and now, with the BlackBerry Bold, it has truly outdone itself. This is the first model in the line to boast 3G HSDPA and Wi-Fi data connectivity, enabling blazing-fast e-mail attachments and Web surfing wherever you roam and super-blazing-fast ones when you're parked in a hotspot.

Web sites still don't look as good as they do on the iPhone, but the 624-MHz processor that now runs the show (twice as fast as in previous BlackBerrys) eliminates delays when navigating menus or selecting items with the trackball and makes for smoother multitasking. Yet even with that horsepower, you're able to get up to five hours of talk time on a charge, and up to 13 days on standby.

Then there's the luscious display. Every time you gaze at this 480 x 320-pixel screen (up from 320 x 240 on the BlackBerry Curve), you’ll be reminded where the Bold got its name, whether you’re showing off pictures or videos captured with the two-megapixel camera, using the media player to watch movies, navigating to your next meeting using the built-in GPS or zooming in on a PowerPoint.

The Bold sounds just as good as it looks, too, thanks to a new acoustic design that increases the phone’s audio sweet spot. Even the keyboard has been retooled with frets -- just like on a guitar -- to help your thumbs go faster. Yes, the Bold rocks.

According to the annual Brandz Top 100 list for 2008, which measures global brands by dollar value, Apple ranked seventh overall with a brand value of $55.2 billion, an annual increase of 123 percent. BlackBerry came in fifty-first on the list with a value of $13.7 billion, but its annual increase was 390 percent.

The File
BlackBerry Bold
In Name Only Bold didn't come from some fancy branding consultant -- it was the word that came up most often when RIM showed the device to focus groups.
Cost: TBA
blackberry.com

iPhone 2.0

The BlackBerry isn't the only smart phone getting quicker. The latest iPhone, said to be due out mid-summer (price TBA), is jumping into the serious-business fray by finally leaving the pokey EDGE network behind and going 3G. No more having to seek out Wi-Fi spots. Plus, the device finally has its own apps, including games from EA. It'll even do push e-mail.
apple.com

Patience Pays Off

Tue, 10 Jun 2008 22:07:45 GMT

In the summer of 2005, Bill MacDonald, then CEO of Houghton International, was seeking some help: He needed a creative solution, fast, to stave off shareholders prodding him to sell his private specialty-chemicals company. MacDonald had a strategic plan for his business and was convinced that his ideas for growth would build significant value. Unfortunately, Houghton's expensive and restrictive capitalization hamstrung his ability to execute his vision, and he faced increasing pressure to obtain liquidity through a sale of the company -- a view that many of my peers at competing investment-banking firms shared.

Then one of our investors introduced MacDonald to me and my colleagues at Watch Hill Partners. For the next four weeks, our team huddled with MacDonald and senior management to review alternatives, including a sale. While some shareholders thought the company was growing too slowly and that things were unlikely to improve, we saw a different story.

After poring over the financials, we agreed with MacDonald that selling the company at that time would have quashed a lot of future potential. So in August 2005, Houghton retained Watch Hill to engage in a recapitalization. Leveraging our relationships with capital-markets players and the financial-sponsor community, we were able to close a $115 million senior debt financing (at 4.25 times EBITDA) four months later to replace the company’s existing high-cost debt.

The new capitalization gave the company the flexibility and breathing room it needed to execute its strategy. Additionally, to satisfy shareholders’ demands for near-term liquidity, we arranged for a 550,000-share equity tender offer funded by GSO Capital (now owned by Blackstone). Houghton rewarded us for a job well done by retaining Watch Hill on a 12-month basis as its strategic adviser. Meanwhile, after witnessing the company's long-term potential firsthand, our merchant-banking affiliate, Watch Hill Capital Partners, decided to take a minority stake in Houghton in September 2006.

By June 2007, MacDonald had achieved his strategic goals, while at the same time boosting Houghton's EBITDA nearly 70 percent. Given the company's newfound position of strength, MacDonald and the board elected to sell Houghton, eventually closing a transaction with AEA Investors in December 2007. Those who had purchased shares in the tender offer made multiples of their investment in less than two years.

We ended up not participating in the sale of Houghton due to a perceived conflict created by our ownership stake. However, our relationship with MacDonald and the newly acquired company didn't end there. MacDonald's appreciation of our resolute support of his vision, not to mention our help in enhancing his company's value, has made him an invaluable part of Watch Hill's CEO network. Now retired from Houghton, he continues to work with us as an investor in Watch Hill and is an enthusiastic reference for new business. Meanwhile, AEA, Houghton's new owner, has retained our firm to advise the company on potential strategic initiatives.

Although this deal was neither the largest nor highest-profile one Watch Hill has completed, I believe our interactions with MacDonald and Houghton exemplify the driving forces behind our business philosophy: perseverance, relentless focus and the perennial, cyclical power of relationships.

Scorecard

David W. Knowlton
Age: 50
City: New York
Firm: Watch Hill Partners
Position: Managing partner
Education: B.A. in political philosophy from Kenyon College, 1980
Career Arc: Began his career with the Joint Economic Committee in Washington, D.C., in 1980. Joined Chase Manhattan that same year and was promoted to managing director in its Acquisition Finance Group in 1986. In 1997, he joined Gleacher & Co. as managing director; there he spearheaded the financial-sponsor program and, following Gleacher's sale to NatWest, served as head of acquisition finance for NatWest Markets from 1997–1999. From 1999–2002, worked as co-head of financial-sponsors group at First Union Securities; cofounded Watch Hill Partners in 2003.
Really Big Deal: In October 1992, helped finance and advise Hellman & Friedman and Franklin Resources on the acquisition of Templeton, Galbraith and Hansberger, one of the most successful mergers in the asset-management industry.

Defense Mechanism

Tue, 10 Jun 2008 22:07:52 GMT

When it comes to high-level takeover defense, Daniel Neff has fended off some of the biggest hostile attempts you've never heard of. Like Wachtell Lipton Rosen & Katz, where he has spent his entire career, Neff is known for annihilating the barbarians (and, lately, the activist investors) who threaten his clients. Also like the firm on whose executive committee he now serves as co-chairman, Neff has become as adept at keeping a lid on leaks as he is at fighting off raiders. "We're shrouded in mystery to the outside world," he says -- and that's just the way he likes it.

Sam Gillespie, vice-chairman of a private energy-exploration concern called Cobalt International and the former general counsel of Unocal, a longtime Neff client, has a succinct explanation for why Neff has become his go-to attorney on the thorniest matters: "He can be hard as nails."

Hired out of Columbia Law School in 1977, Neff is one of several attorneys who have played quiet but crucial roles in developing Wachtell into the most profitable law firm, per partner, in the world -- and one of the most feared. Along with other second-generation partners such as Ed Herlihy and Andrew Brownstein, he's "one of the guys who helped build Wachtell Lipton into what it is today," says William Harker, general counsel of Sears Holdings and a former associate under Neff at the firm. Wachtell has shaped Neff as well, of course. Brought up in its culture, having known nothing else, he could be an embodiment of it.

When he first joined the firm, Neff says, "the place just crackled with energy." But he remembers feeling as though he had taken a big risk in accepting the job. "My classmates said to me, 'You're going where?' The firm's position had not reached where it is today." Neff had the academic credentials (he was on Law Review) to work at any of New York's white-shoe firms, but he was more attracted to the upstart practice, founded only 12 years earlier, with its aggressive, deal-centric culture: "I was not trying to go to the biggest name. I wanted to find a place that would present real opportunity for growth and development in one's career. I sure found it."

Six years after joining Wachtell, Neff made partner. The promotion was not particularly speedy, at least for that era, he says, especially considering the experience he had been receiving. There was United Technologies' takeover of Carrier Corp. in 1978, which pitted the still-emerging Wachtell Lipton against the venerable Davis Polk & Wardwell. There was the defense of McGraw Hill against American Express in 1979 -- one of the most vitriolic hostile bids of all time -- in which Wachtell eventually outmaneuvered archrival Joe Flom, of Skadden Arps.

During the raucous '80s, the firm, and Neff, came to specialize in the defense of companies against hostile-takeover artists (Lipton's invention of the poison pill being the ne plus ultra of such defenses). Over five years -- a period that included Wachtell's landmark work for Newmont Mining in 1987 -- Neff helped seven companies escape the grip of T. Boone Pickens. He minted his first billion-dollar deal in 1983, when he helped sell General American Oil to white knight Phillips Petroleum as a means to avoid the ravenous Pickens.

Liquidity Play

Tue, 10 Jun 2008 22:07:59 GMT

Jack Glover liked the numbers the moment he set eyes on them. The only problem was, the rest of Wall Street did, too.

The statistics were beyond compelling: a sector that had long been valued well below its proven worth; an industry whose stocks, though not traditionally blue-chip, had for the past decade cut a blue-chip profile, many of them beating the S&P 500; and a product category with a long history of being able to sidestep cyclical headwinds. Best of all, its prospects were only improving, with no end in sight.

Worst of all, everybody knew it.

"Water is the only commodity in the world whose price does not yet fully reflect its actual supply and demand," says Glover, 42, a partner at PNC Equity Partners, the $500 million private-equity affiliate of PNC Financial Services Group, Pittsburgh's multibillion-dollar bank. "But it's become an extremely tight industry. You can't crack it by cold-calling people. You have to know the space, and you have to know the people in it." That's easier said than done, though, in an industry that doesn't present a significant number of investment opportunities.

"The challenge in private equity as it relates to the water sector is that there have only been about a half-dozen deals in recent years," says Jud Hill, 53, a 25-year industry veteran who handled water-related deals for HSBC, private-equity firm Aqua International Partners and, most recently, Halifax Group, a private-equity arm of Texas Pacific Group. He became managing partner this year for Summit Global Management, a San Diego investment-advisory firm specializing in water bets. "It's a very expensive place to try to find opportunities -- General Electric, Danaher and others have been happy to pay about 20 times EBITDA for these companies."

Though the U.S. ranks fourth among the nine countries holding 60 percent of the world’s freshwater supply (Brazil is first), its water tables are being depleted much more quickly than they're being replenished, thanks to the perfect storm of global warming, pollution and a population surge outpaced twofold by the accompanying demand for water. The hard reality is that there are simply a lot more people competing for the planet's only commodity for which there is no substitute.

Flash water shortages, the opposite of flash floods, have become increasingly common, specifically in the American Southwest, as has the new buzzword peak water, invoking a term once used only in reference to oil and energy stocks. Meanwhile, the infrastructure necessary to deliver water -- some of which dates back to Abraham Lincoln's presidency -- is disintegrating. (Remember the steam-pipe explosion in Manhattan last summer that killed one person and injured more than 30? That pipe was installed in 1924. Perhaps even more alarming, the incident was one of about a dozen similar pipeline ruptures in the city over the past two decades.)

Net Gain

Tue, 10 Jun 2008 22:08:06 GMT

Just as the clock runs out, a shot from behind the three-point line swishes through the net -- one last gibe at their opponents by the home team. With the scoreboard showing a final of 32–24, Steve Orr is among the smiling faces on the sideline. Orr, however, couldn't care less which team has won. Instead, what has made this banker-turned-philanthropist's night is the crowd of private-equity bankers, hedge-fund managers, high-school students and former New York Knicks players who surround the court.

For the players, the sound of the buzzer confirms the private-equity team's win, marking a second straight victory over their hedge-fund rivals in the two-year-old spotlight game to raise money for basketball teams at New York City high schools that otherwise couldn't afford them. As a handful of PE bankers spill onto the hardwood to congratulate their colleagues and taunt the losers, the noise level rises inside the Park Avenue Armory's cavernous gymnasium. Players, coaches and referees head to the five other courts that fill the room to kick off a round-robin tournament featuring 24 teams -- each comprising a mix of high-school students and representatives from the corporations that have paid either $15,000 or $25,000 apiece to sponsor a squad.

The flurry of activity is all part of this year's Net Gain Basketball Tournament, one of three major fundraising events hosted annually by Youth, I.N.C. (Improving Nonprofits for Children), an organization founded by Orr that aims to help New York City children's charities expand and get better at what they do.

A former Goldman Sachs banker who worked in the firm's financial-institutions group, Orr, 54, left his high-paying job 17 years ago, refashioning himself into a leader in the nonprofit world. That's not to say that he left Wall Street -- or the golden Rolodex he developed there -- behind entirely.

As cofounder and managing partner of Washington, D.C.–based Orr Associates Inc. -- a consulting firm for nonprofit groups -- and the executive director of Youth, I.N.C., Orr has put the skills he acquired on Wall Street to work for charities, teaching nonprofits how to better run their organizations and providing them with the resources to do so. He splits his time between his two groups, but Youth, I.N.C. is where his heart truly lies. "Youth, I.N.C. is my passion, and if I could do it full-time I would," says Orr, whose Wall Street origins have helped him garner support from some of the biggest names in high finance, including LBO kings Henry Kravis and Stephen Schwarzman and hedge-funder Marc Lasry, a managing partner at Avenue Capital.

A native of East Grand Rapids, Michigan, Orr got an early sense of the importance of charitable efforts from his parents. His mother was involved with the Junior League; his father, the owner of a Michigan company that manufactured bumpers for the automotive industry, took things to a whole other level, spending half his time volunteering with a refugee-rescue organization and a cultural and leadership exchange program with various charitable groups in Central America. "It was interesting seeing philanthropy through my father's eyes, and the impact that a town in Michigan could have on global activities," Orr says. "But I didn't translate that in my mind into any sort of career path."

Though he often helped with his father's volunteer efforts, Orr sought a career on Wall Street. He received his undergraduate business degree from Michigan State in 1976, then headed to Thunderbird, the American Graduate School of International Management in Glendale, Arizona, for his MBA. Afterward, he spent a year at Chemical Bank, took a job in sales and trading on Citibank's New York foreign-exchange desk, and in 1984 jumped to PaineWebber to head the firm's capital-markets desk. Two years later, he joined Goldman's investment-banking division, where he covered commercial banks, insurance companies and thrifts.

But after having spent more than a decade on Wall Street, Orr began questioning whether he wanted to work on banking transactions for the rest of his life. Aware of the myriad problems faced by New York's poor urban youth, he began searching for volunteer opportunities. "I started looking into charities and ways I could participate, give back and help out," he says. "But when I went to institutions like the United Way and asked how I could volunteer beyond giving money, there was really no avenue they could figure out to employ my market expertise and merger knowledge."

Lending a Hand

Tue, 10 Jun 2008 22:08:15 GMT

Donald Gogel, the chief executive officer of the venerable Clayton Dubilier & Rice, knew his deal was on the verge of collapse. It was late August 2007, less than two months after his private-equity firm, along with Bain Capital and the Carlyle Group, had announced an agreement to buy Home Depot's HD Supply construction-supplies unit, and already the business climate had changed dramatically.

In July, the subprime-mortgage crisis quickly spilled into the broader debt markets, as investors fled the risky loans and bonds that had been funding buyouts and took flight to the safety of Treasurys. Seeking more financial protection, Lehman Brothers, JPMorgan Chase and Merrill Lynch -- the three investment banks providing the $8.6 billion in financing -- were balking at the terms of the original loan. Meanwhile, the private-equity firms weren't budging, and members of the Home Depot board were losing patience. With all sides in a deadlock and time running out, the beleaguered Gogel knew exactly who to call: James Bainbridge Lee Jr.

Jimmy Lee, the tenacious 55-year-old vice chairman and a senior rainmaker at JPMorgan, has over the years earned a reputation as one of the savviest and most effective troubleshooters on Wall Street. "If anyone could talk to the other banks, bring them to the table and try to find some common ground, Jimmy could," Gogel explains. "He has long and deep relationships, which makes him more often than not the choice to be the go-to guy."

Within 24 hours, Lee had cut short a vacation to rush back to his firm's Park Avenue headquarters, where he camped out for the next two weeks trying to salvage what would be viewed as perhaps the most pivotal leveraged buyout of 2007. Though the $10.3 billion deal was hardly the largest, it was the first in a string of high-profile mega-LBOs -- including those of Texas utility TXU, credit-card processor First Data and wireless operator Alltel -- slated to close in the fall, and its success or failure would set a precedent for those that followed. "There was a period when there were only two people onboard," Gogel recalls. "Me and Jimmy."

By the time the Home Depot board met on Sunday, August 26, Gogel and Lee had swayed a handful of other key players to see their way to solidifying what ended up being a whole new deal. The upshot: At Lee's urging, Home Depot agreed to cut its price to $8.5 billion, the banks agreed to provide financing -- including a reduced loan of $1 billion guaranteed by Home Depot -- and the buyout firms agreed to put in more equity, pay the banks higher fees and give Home Depot a 12.5 percent stake in HD Supply.

Gogel's desperate call was hardly the first, or only, one Lee has received in recent months; many prominent titans of private equity and corporate America have him on emergency speed-dial. In the past year alone, nearly a dozen CEOs and buyout heavyweights have called on him to help put together -- or, in many cases, keep together -- some of Wall Street's most complex merger transactions. Among them: Citadel's bailout of E*Trade, Chrysler's sale to Cerberus Capital Management and the Sallie Mae rescue plan.

"Jimmy has access, but he earns it because he gets the job done," says Stephen Feinberg, the reclusive founder of Cerberus. "He has a unique ability to get down to the crux of the matter. Even in a tricky market environment, he's able to see things clearly and act decisively."

Alpha Tale

Tue, 10 Jun 2008 22:08:23 GMT

By his own admission, Bob Greenhill has never had much interest in being a manager, despite having led three investment banks during his celebrated 50-year career. It doesn't appear to be in his nature. A high-functioning charmer, a work-hard-play-hard man about town, a suave exemplar of the rainmaker’s art, he says he finds administrative work dull.

The image he presents is that of a doer -- not a talker or a bean counter or a bureaucrat -- and the tales that make up the anthology of his legend bolster that depiction. He got his pilot's license in his fifties for the express purpose of throttling up a jet and zooming to far-flung meetings with his corporate-titan clients. "He flies like he lives," says one former employee. "Full speed, all the time." His idea of kicking back is heliskiing, or motorcycling, or canoeing above the Arctic Circle with old explorers' journals as his only guides. His favorite retreat is a house in the Maine woods, without electricity or phone lines, from which he once had to snowmobile 15 miles into cellphone range so he could talk to Tom Hicks, a client, who was on the verge of buying $1.5 billion in radio assets from Sumner Redstone (another old client).

You get the feeling that Bob Greenhill is the kind of swashbuckling deal maven with a personality too large, too Type A, for the drab rooms where tedious things like budget meetings occur. His appearance lends that impression: He wears suspenders like an admiral wears epaulets. He has backswept auburn hair, a ruddy complexion that bespeaks quality tee times at exclusive country clubs and a smooth, contagious, easy-money laugh, with which he punctuates conversations like an old gambler on a hot streak. In some lights he resembles Jackie Mason. In others, the actor Albert Finney.

By all accounts, the 72-year-old is at his best in the C-suites of clients who will, in all likelihood, write him seven-figure checks in exchange for his advice. Where he's not at his best is any place that involves administration, a weak spot that perhaps contributed to his ouster first as president of Morgan Stanley in 1993 and later as head of Smith Barney (where he was replaced by Jamie Dimon).

But Greenhill made up for any career missteps when, based on his professional mantra of "unconflicted advice," he built his own advisory firm, Greenhill & Co. (see "The Coda of Bob Greenhill,"), into perhaps the most famous and successful investment-banking boutique of the last 20 years. What's perhaps most remarkable is that he did so after having entered what most people consider retirement age. As friends, colleagues and clients attest, the man's greatest asset isn't necessarily his smarts, his charisma or his oft-cited discretion. It might, instead, be his sheer energy. 'He loves to push himself," Hicks says. "He defies age."

The Survivor

Tue, 15 Jul 2008 19:46:40 GMT

What does Nicholas B. Paumgarten consider the greatest triumph of his 30-year career? Negotiating the sale of Barnett Banks to NationsBank? The sale of First Security to Wells Fargo? No, overcoming dyslexia. "They called me a dope," he recalls.

Paumgarten, 63, the chairman of Corsair Capital, a Manhattan private-equity fund focused primarily on financial-services investments, credits his learning disability with ultimately helping him succeed: "Unlike brilliant doctor types," he says, citing a well-publicized recent study, "people who are dyslexic statistically tend to be more entrepreneurial."

Born in Philadelphia, Paumgarten certainly comes from go-getter stock: His father was an Austrian Olympic skier, while his mother's roots go back to the Quakers who arrived in the New World in the 1680s. (His great-great-great-grandfather, Nicholas Biddle, served as president of the Second Bank of the United States.) After graduating from Penn and getting his MBA from Columbia, he joined First Boston, where he built up his expertise (and Rolodex) as a top mergers adviser to U.S. financial institutions.

Then he got the entrepreneurial itch to try his hand at private equity. JPMorgan recruited him in 1992 to raise Corsair, the bank's first fund designed to make investments out of the rubble left by the savings-and-loan crisis of the late '80s. But by the time Corsair raised enough money to begin, the S&L industry had largely recovered. So the firm looked instead to invest in troubled banks overseas.

Corsair hit a difficult stretch on its first deal, however, when it took a stake in Spain's Banco Español de Crédito SA. The bank was soon seized by the Spanish government, and its chairman, Mario Conde, was found guilty of fraud. (Although Corsair reportedly avoided a loss on the deal, its involvement was embarrassing for JPMorgan.)

Since then, Corsair has charted a smoother course, investing in Latin America, Asia and Europe, snapping up parts of Boston-based commercial lender NewStar Financial and South Korea's KorAm Bank, which it sold to Citigroup in 2004. A recent investment in Cleveland's National City, meanwhile, marked Corsair's first foray into U.S. banks. "The timing is right," Paumgarten says. What has this deal stalwart learned as he fought through challenges? Here are his top three precepts.

1. Build a Think Tank.
As a youngster, Paumgarten had difficulty reading and writing, so early on he learned to work with people whose strengths helped make up for his weaknesses.

2. Loyalty Pays.
"I've been married 42 years," Paumgarten says. He takes his professional interactions as seriously as his personal ones: "We're relationship people. We like to build relationships and keep them."

3. Keep Your Head Down.
"Don't waste energy on getting recognition," Paumgarten says. "Stay focused and do the things you do best."

Paumgarten also has strong media-industry ties. He's on the board of the E.W. Scripps newspaper chain, and he worked on the seminal news-biz deal, the New York Times' purchase of the Boston Globe in 1973. His son (also named Nicholas) is well-known in his own right: He's a staff writer for the New Yorker.

Scorecard

Nicholas B. Paumgarten
Age: 63
City: New York
Firm: Corsair Capital
Position: Chairman
Education: B.A. in history from the University of Pennsylvania, 1967; MBA from Columbia, 1971
Career Arc: Joined First Boston in 1971, where he rose to become head of Credit Suisse First Boston's global financial-institutions group. Joined JPMorgan in 1992 as managing director to launch the Corsair fund; served as head of the financial-institutions group from 1994–1996 and co-head of M&A for North America from 1996–1998.
Really Big Deal: A recent $7 billion investment in Cleveland's National City, Corsair's first foray into U.S. banks.

The Coda of Bob Greenhill

Tue, 10 Jun 2008 22:08:37 GMT

When Bob Greenhill announced last October that he was stepping down as CEO of the firm he had founded in 1996,hardly anyone noticed. The news, mostly ignored by the media, was buried in a company press release on third-quarter earnings. The markets passed over it as if it were just another personnel shift; Greenhill's NYSE-listed shares traded nearly flat that day.

Internally, reaction was even more muted. Greenhill himself had composed a memo on the subject, e-mailing it to his workforce of 220 -- though to this day he has trouble explaining exactly why he made the decision when he did, other than to say that it was "the appropriate time," and necessary to make the firm's succession plans clear. There was no triggering event -- no health problem, no sudden impulse to retire and live out the rest of his days in ease with the massive fortune he had amassed by taking his firm public in 2004. Greenhill, in fact, said he still intended, as the company's chairman, to help execute deals pretty much as he always had.

In some ways, the shift was purely titular. Day-to-day management of the M&A advisory shop had, effectively, been the responsibility of co-presidents Scott Bok and Simon Borrows since before Greenhill's IPO. (Both men -- Bok is head of the U.S. office; Borrows, a Briton, heads the London outpost -- were promoted to co-CEO when their boss stepped upstairs.)

But in other ways, the shift was a nod to the inevitable. Greenhill, 72 in June, is at the twilight of a celebrated Wall Street career (see "Alpha Tale") that has spanned more than five decades, starting in 1962, when he landed a job as an associate at Morgan Stanley out of Harvard Business School. He's the kind of banker whose name always comes coupled with references to his Rolodex, that hoary metaphor for the possession of close relationships inside corporate America's most posh executive suites.

Known for the loyalty he inspires in clients, Greenhill built his firm on these relationships and his subsequent reputation as an adviser to titans, and although other legendary dealmakers have left white-shoe firms to strike out on their own, few have found as much success as Greenhill in so short a time (or so late in life): His company boasts a market cap of about $1.6 billion, 2007 revenue of $400 million and a stable profit margin of 40 percent. "Greenie has as good a Rolodex as anybody I've ever met," says Tom Hicks, a longtime friend and client. "But he doesn't just know a lot of people; people trust him." And yet, of course, there will come a time when Greenhill's presence at his firm will come to an end -- which raises the obvious question: What happens to Greenhill & Co., still in its adolescence, when its chief executive is gone?

Not Your Father's Financial District

Mon, 09 Jun 2008 10:00:47 GMT

From the thirty-eighth-floor window of his 30 Broad Street office, Legend Merchant Group's Sean Gambino looks out at the epicenter of New York's storied Financial District and shakes his head. A 16-year veteran of the securities industry, Gambino, whose firm specializes in SPAC deals, has a profound appreciation for the history down here, and for the way things used to be.

"Every day I watch the floor traders parked outside the Exchange, furiously working their BlackBerrys," Gambino, 37, says. "There's not as much face-to-face interaction."

The essence and culture of the area is changing, he explains. Take the Hermès store at 15 Broad, for example. "Not long ago, there was a Bugatti Veyron parked outside the store," Gambino recalls. "It was decked out in Hermès leather and filled with all this custom leather luggage. Not what I'm used to seeing on Wall Street."

Not only is Manhattan's Financial District -- call it everything south of Chambers Street -- welcoming new luxury retailers, but the fabric of the entire area is being radically transformed. What was once a cavernous citadel of men, concrete and their moneymaking schemes has, thanks to a real-estate boom, tantalizing post-9/11 tax abatements and Liberty Bonds, emerged in the past few years as a high-end developer's dream.

While a range of potential setbacks lies ahead -- looming recession, the bursting of the real-estate bubble, uncertainty surrounding the future of the lifeblood NYSE -- a host of other forces suggests that the makeover of the Financial District has only begun. And, furthermore, that there is no turning back. Hybrid trading may spell the end of the NYSE, but insofar as FiDi is concerned, the term is emblematic, as commercial melds with residential, historic allure with modern amenities. Fittingly, it is money and crowds (rich people, many of them foreigners) driving the transformation.

"It's more than the arrival of a Thomas Pink store changing the landscape; there's a change in attitude as people think of FiDi as a place to live," explains Scott Placona, a 25-year-old investment-banking associate at Joseph Gunnar & Co. "It's not so much about the disappearance of tradition, but a fresh appreciation for what Lower Manhattan means to the city -- and the world."

"If J.P. Morgan were around today to see BMW open a showroom on his block, I think he'd be stunned," says David Miranda, a former NYSE specialist who grew up on Sullivan Street just north of the neighborhood. "This is a major metamorphosis."

Starting at the intersection of Wall and Broad and radiating outward, river to river, the forging of an upbeat, upscale destination is a working order with no resistance. Receding are the days when interloping armies simply worked in the Financial District and bolted as fast as they could finagle use of the company car service. "Even a few years ago, it was so empty down here after the closing bell you could lie down in the street," says Vincent Alessi, a managing partner at Bobby Van's Steakhouse, which arrived on Broad Street in 2005. "Now we're packed almost every night with a regular Wall Street crowd."

In 1990, just 14,000 residents lived south of Chambers. Today, that number has grown to more than 50,000 -- and Elizabeth Berger, president of the Alliance for Downtown New York, projects it will reach 60,000 by year's end. Since 2005, more than 13 million square feet of former office space have been converted into some 11,000 new apartments. "Our mission is to animate Lower Manhattan," Berger declares. "This neighborhood is not 'on the verge' of anything -- it's here."

Everywhere in FiDi one finds startling evidence of this transformation: the luxury-brand retailers (Tiffany's, Hermès, Thomas Pink) that have set up shop within spitting distance of the Big Board; the condos that have engulfed 25 Broad, once the storied Broad Exchange and the former home of PaineWebber, not to mention a historic hub for legions of curbside traders; the $27,800-per-year prep school, Claremont Prep, that resides in what was once the Bank of America International building. The former JPMorgan Chase building at 75 Wall has a beach planned for its forty-second-floor deck. Pram-pushing parents populate the circa-1903 Cocoa Exchange building on Wall Street Court. Artful lodger André Balazs -- who anointed FiDi the new Soho last year -- is diving in with his 47-story William Beaver House across from Delmonico's. Epic megaliths steeped in history, such as the former Chase Manhattan digs at 20 Pine, have been converted to luxury residences replete with yoga studios, swimming pools and rooftop gardens.

But what does this all mean for the money monoculture that has dominated the labyrinths of Lower Manhattan for almost four centuries? Will it be cast aside by a master plan unseen in New York since the days of Robert Moses, or might it be the pivot of the most dynamic turn yet of FiDi's evolutionary wheel?

That, indeed, is the big-money question -- $20 billion rebuilds the World Trade Center site alone -- but in this New York financial story, the bulls are already edging the bears.

The Rising

Tue, 10 Jun 2008 22:08:53 GMT

Soirées rarely come any more sizzling than the one thrown by Sports Illustrated February 12 in New York to celebrate the launch of the magazine's 2008 Swimsuit Edition. Heavy snow was blanketing the city outdoors, but inside was considerably warmer as numerous models -- including SI cover girl Marisa Miller -- paraded before the rapt crowd.

All the more breathtaking was the venue: the top floor of 7 World Trade Center. "People should be aware of the magnitude of this building," said swimsuit model Brooklyn Decker, who lives in Manhattan, "and if that means coming up here in skimpy clothes, I am more than ready to promote it."

Last to fall on September 11, 2001, some seven hours after the Twin Towers collapsed, 7 WTC was the first to be rebuilt. For now, the 52-story structure stands as a beacon of just how far Lower Manhattan has come in the ensuing six-plus years.

For developer Larry Silverstein, the office building, begun in 2002, completed in 2006 and currently three-quarters leased, is the prism through which downtown’s redevelopment should be viewed. "Six of our nine major tenants moved here from Midtown," he says. "And our tenant mix spans the business world, from design and publishing to financial and scientific. This is the beginning of the total transformation of downtown -- not just rebuilding the towers we lost, but creating a diverse business community in the heart of a dynamic, 24/7 neighborhood."

It's the action on 7 WTC's tenth floor that really gets the blood pumping. First, there are the scale models and video projections of the new WTC site, including Towers 2, 3 and 4, all of which Silverstein is developing. He has arranged a custom-built collaborative design lab for the architects, engineers and other professionals of the three firms working on his portion of the WTC reconstruction. From 7 WTC's south-facing windows, they can observe the beehive of construction in what was formerly known as Ground Zero, but is now called (as it was back in the late 1960s during the start of the original WTC project) the "Bathtub."

For anyone who assumes the Freedom Tower is still bogged down in bureaucracy and going nowhere, here's a news flash: It's already taking shape. Foundation steel and a three-foot-thick concrete core rise toward street level.

Of special note to the financial community: Towers 2 and 3 will each have purpose-built 55,000-square-foot trading floors. Meanwhile, Westfield Properties, builders of some of the largest, most ambitious shopping centers in the world, is set to bring in nearly half a million square feet of retail across multiple levels of the site. Plans for a multilevel transit terminal and a performing-arts center are also in full swing.

There are, it's worth noting, no tenants lined up for the Freedom Tower. Which raises a sensitive question: Who would be willing to occupy offices with such a security stigma?

There is early speculation that for both symbolic and pragmatic reasons, the Freedom Tower will be largely a "government" building. This is borne out by early leasing activity: The Alliance for Downtown NY reports that New York State has agreed to lease 415,000 square feet, while U.S. Customs & Border Protection has executed a Memorandum of Agreement for 600,000 square feet. Key players at primary leasing agent Cushman & Wakefield declined interview requests. However, the Alliance also reports that "Cushman & Wakefield expects to have the building substantially leased...and ready for occupany in 2012." A tough road surely lies ahead, but the prevailing mood is one of optimism. Note to developers: Set aside some space for those in possession of the determination required: dealmakers.

Redistricting

Tue, 10 Jun 2008 22:09:01 GMT

1. New York Stock Exchange
11 Wall Street
The number of clerks, specialists and brokers on the NYSE floor has been roughly halved to 1,700 from 3,000 at its peak as trading moves electronic; some believe the exchange may eventually become a full-time tourist attraction/museum/television studio.

2. The American Stock Exchange
86 Trinity Place
Long the redheaded stepchild of exchanges, the AMEX is set to be acquired by the NYSE. Its classic Trinity Place headquarters could be next in line for a mixed-use conversion.

3. The New York Mercantile Exchange
1 North End Avenue
In March, the CME Group announced it would acquire the NYMEX for $3.4 billion in stock and cash as both move to electronic trading.

4. New world headquarters of Goldman Sachs
West Street between Vesey and Murray Streets; Battery Park's "Site 26"
Expected to open in 2009, this 43-story glass and stainless-steel tower will house six high-tech trading floors.

5. Merrill Lynch
4 World Financial Center
The famous brokerage firm, rocked by subprime woes, nonetheless recently extended its lease downtown through 2018.

6. 1 Wall Street Court
1 Wall Street Court
Formerly the Cocoa Exchange, the 105-year-old building was converted in 2006 into a 15-floor, 126-unit condo.

7. 10 Hanover Square
10 Hanover Square
Converted in 2005, this 24-floor, 493-unit luxury rental dwelling was once Goldman Sachs's headquarters.

8. Equinox
14 Wall Street
A coin flip away from the NYSE, this posh fitness center is coupled with retail space and part of a development owned by Capstone Equities and the Carlyle Group.

9. Brown Brothers Harriman
140 Broadway
Among Wall Street's most storied firms, BBH moved to this modern, sleek skyscraper along Cedar Street in 2001.

10. The Crest at 63 Wall Street
63 Wall Street
Originally built in 1929, this 36-story neoclassical building was the former home of storied private bank Brown Brothers, which in 1931 merged with Harriman Brothers, then located at 59 Wall Street. The 63 Wall building now houses 476 luxury rental apartments; it was the first residential building to open on Wall Street after the September 11 attack.

11. Thomas Pink Flagship
63 Wall Street
The London clothier opened this 3,000-square-foot shop here, between Hanover and Pearl, in summer 2007.

12. Future site of the Freedom Tower
Bounded by West, Vesey, Fulton and Washington Streets; formerly occupied by World Trade Center towers 1 and 2
Construction has begun on this Port Authority–led project, which will include a 9/11 memorial, a cultural center and shopping options. Cushman & Wakefield is handling the leasing.

13. 7 World Trade Center
250 Greenwich Street
Larry Silverstein's 52-story office space is the first of the World Trade Center sites to be rebuilt, and is already about three-fourths leased.

14. Cipriani
55 Wall Street
The restaurant/bar/event space/condo complex occupies a space that was home to the New York Merchants' Exchange, the Custom House for the Port of New York, National City Bank and the Regent Hotel.

15. Tiffany & Co.
37 Wall Street
One of Manhattan's first skyscrapers, this building was once home to Trust Company of America. In addition to the famous luxury retailer, the site now boasts 373 high-end rentals.

16. Claremont Prep
41 Broad Street
Housed in the former Bank of America International Building, this tony private school opened three years ago. What was a grand banking hall featuring restored historic murals by Griffith Baily Coale has been transformed into an auditorium and performing-arts center.

17. Future site of W New York–Downtown Hotel and Residences
123 Washington Street
Already under construction one block south of the Freedom Tower, 72 of 223 condos in this 58-story tower sold out on day one.

18. Future site of Four Seasons Hotel and Condominiums
99 Church Street
This proposed 80-story tower would be the tallest residential building in Manhattan. Construction starts in June.

19. Bobby Van's
25 Broad Street
25 Broad used to be Broad Exchange, and was PaineWebber's headquarters for 70 years; it's now the area's most popular restaurant-and-condo complex.

20. Hermès
15 Broad Street
This luxury men's clothing store opened in the former JPMorgan headquarters in 2007.

21. 45 John
45 John Street
Once an office building owned by the Dutch Protestant Church, 45 John will have condos available later this year.

Top 10 Deal Spots

Mon, 09 Jun 2008 15:13:58 GMT

Explorer Henry Hudson sure knew a good deal when he saw one. His navigation around the narrow-tipped isle of Mannahata in 1609 -- the voyage's 400th-anniversary celebration is next year -- and subsequent journey up the river that would come to bear his name set the stage for New York’s eventual transformation into the place George Washington would call the "seat of the empire" in 1785.

Indeed, from its earliest days, New York was busy making appointments with history. Take Wall Street: Once a muddy trading post, this famed thoroughfare and its surrounding canyons would become the star at the center of the financial universe. For four centuries, power brokers have navigated and negotiated the gilded corridors of this financial fortress. Where do they go today? Here are our Top 10.

Ritz-Carlton at Battery Park
2 West Street
Here's how the deal unfolds at the Ritz: First, you meet your party -- one-on-ones are big here -- in the Lobby Lounge. Then, you have either breakfast or lunch in the hotel's spacious 2 West restaurant, whose large tables leave plenty of room to spread out laptops and paperwork. Once the contracts are signed, you head up to the fourteenth-floor Rise bar for martinis, mini-burgers and an outdoor terrace with incomparable views of New York Harbor and Lady Liberty. The bar, which opens at 4 p.m., is also a great sorrows-or-joy barometer of how the markets performed that day.

Delmonico's
56 Beaver Street
Once known as the "Citadel," this circa-1830 landmark at William and Beaver Streets has seen Andrew Carnegie, "Diamond Jim" Brady and generations of money men power through its marble-pillared entrance. It remains a magnet for throwing down the big blue-chips, says owner and managing partner Dennis Turcinovic, especially in its legendary Board Room. Newly acquired, merged or public celebrants are de rigueur. The same goes for big architectural deals, and recently, two Fortune 500 CEOs were minted here -- handshakes, paperwork, signatures and all.

Bobby Van's Steakhouse
25 Broad Street
How does Bobby Van's seal the deal? It's situated directly across from the NYSE; the energy and personalities at the bar and restaurant are vintage Street; and in the downstairs Vault Grill -- JPMorgan & Co's bank vault from 1902 -- there's the Closer Room. Here, dealmakers are on display like the wine, but the room, with a table for four that can double to eight, is soundproof. Says managing partner Vincent Alessi: "If you can't close the deal here, you won't close it anywhere."

Harry's Steak
1 Hanover Square
Even before launching his eponymous Wall Street bastion in 1972, Harry Poulakakos was laying in oenological gold. For all you beer drinkers, that refers to fine wine, and the cellar’s always been stellar at Harry's. Today, the Grotto area at the back is where you'll find the deals flowing along with the vino. It can start in mid-afternoon or at dinner, but when the corks pop on such classics as 1969 Chambertin Clos de Beze ($495), it's a safe bet that the negotiation's off to either a flying start or a dramatic close.

Cipriani Wall Street
55 Wall Street
Investment bankers, real-estate developers and private-equity stalwarts alike retreat to the second-floor bar/restaurant of this landmark fortress -- now unmistakably bellini'd with the Cipriani imprimatur -- which has played host to Wall Street action since 1842, including a spell as precursor to the Exchange. The luxe, loungy ambiance comes well cologned, perfumed and gelled à la Gordon Gekko. Overlooking Wall Street, the colonnaded outdoor terrace, now free of its winter canopy, sets the stage for easing prospects into term-sheet readiness.

Les Halles Downtown
15 John Street
This outpost of the Park Avenue brasserie made famous by chef Anthony Bourdain was in early on FiDi's revitalization, opening just three months after 9/11. Sorely missed are owner Phillipe Lajaunie's high-octane "Diner Des Amis," but whichever side you're banking on, the room’s Left Bank energy and regional French specialties will have you shouting "vive le deal!" until the petit hours. Says general manager Pamela Gill: "We feel the essence of the deal is putting people at ease."

MarkJoseph Steakhouse
261 Water Street
Count Goldman, Deutsche and AIG among the "magnum cum laude" dealmakers who break open the big bottles and stamp the big transactions at this top-rated Seaport haunt. Tourists mount hostile takeovers on weekends, but during the week, it reliably runs as a clubhouse for the in crowd. Chef Frank Morales’s charred, juicy specialty is the deal-classic porterhouse, with shrimp cocktail, superior side dishes and single-malts rounding out the culinary-capital structure.

Nelson Blue
233–235 Front Street
Every Wednesday, says vivacious co-owner Michelle Casano, young guns at Deutsche, JPMorgan and Merrill call her looking for inside information. Blue Horseshoe loves Anacot Steel? No, Wall Street loves Nelson Blue, and wants to know how the girls are costuming for every Wednesday's "Staff Theme Day." A recent "Schoolgirls Day" was especially fun, and fun appears to be the guiding philosophy of this New Zealand gastro-pub, which celebrated its one-year anniversary in May with a Maori dancefest. The NYBOT had a big closing party here, and commodities traders and dealmakers alike agree: It's a great place to warm up business relationships.

2 Gold Street Rooftop
2 Gold Street
The inside word is that rampant dealmaking occurs atop this 51-story rental tower, which occupies the former site of the Federal Reserve Bank of New York Annex. Opened in 2005 and marketed as "24-karat living" (with the rent to match), the building offers this summit featuring a solarium with fireplace, wet bar and kitchen, landscaping and lawn -- and unbeatable downtown views. This, says a veteran power broker, is where a new generation of power brokers talks big numbers almost every night.

Stone Street
Just as a deal can have senior, mezzanine and junior loan portions, centuries-old Stone Street, once a trash-strewn alley but now the cobblestone epicenter of the downtown bacchanal, deals out a range of venues for those of various maturity levels. Above Harry's in the landmark 1851 India House, the private rooms, fire-lit parlors and Blue Bar at Bayard's (1 Hanover Square) are for gentlemen power brokers. Floor brokers, meanwhile, flock to Nebraska Beef (15 Stone) for the Amazonian barmaids and, as one insider suggests, "not to get deals done but to lighten and smooth the transaction." For the younger set chasing deals on the romantic side of the sheet, Ulysses (58 Stone) has picked up where the Seaport of the '90s left off.

Where the Deals Are

Tue, 10 Jun 2008 22:09:31 GMT

It's more than just a theory that the perception of a recession, spread by the media and word of mouth -- whether or not economic indicators are there -- can actually cause one. Consumer confidence, of course, is a leading driver of growth.

But does this concept hold when dealing with far more sophisticated observers, who aren't necessarily swayed not to buy a car because Fox News airs a story about the price of rice? Sophisticated observers like, say, the M&A world, filled with financial professionals whose success more or less entails reading the markets correctly? The past few months have provided something of a test, with headlines like at the gates of hell, from the Economist, bolstering the notion that the private-equity sky is falling.

Such an environment provides an opportunity for savvy dealmakers to make serious returns, as long as they're prepared to adapt. The rules until recently -- cheap debt and outbidding one's opponents -- have been replaced by smart debt and outthinking one's opponents. Whereas two years ago, just about anyone with a smidgen of money could do a deal, we've now entered a period in which to create fruitful opportunities, it helps to be a true master.

By and large, those opportunities are presenting themselves in the middle market, where a sweet spot has emerged in transactions between $250 million and $1 billion in enterprise value. In April, for example, instead of doing a multibillion-dollar, headline-grabbing deal, the Carlyle Group partnered with J.H. Whitney, a middle-market buyout firm, to purchase Texas-based Authentix, which develops and delivers authentication and brand-protection devices, and also works with state and local governments to collect excise taxes for goods such as cigarettes. Terms were not disclosed, but sources confirm that Carlyle's outlay was paltry compared to, say, its $6.3 billion Manor Care deal last year. The total price tag, Dealmaker estimates: a bit over $100 million.

"It's undoubtedly a more challenging time, but extremely talented dealmakers are taking advantage of the turmoil," says David Mussafer, managing partner of Advent's North American buyout group. "The challenging environment is forcing firms to really look closely at their deals and make wiser choices. For this reason, this could wind up being one of the better vintage years for funds."

The middle market has attractive attributes: stability, with a greater abundance of targets (even when the big deals hum, the middle market represents roughly 75 percent of the action), and demographic motivation (Baby Boomer owners who are near retirement and in search of liquidity).