Two-decade Pfizer mission pays off for Guggenheim's deal king

Thu Nov 26, 2015 5:46pm EST
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By Pamela Barbaglia and Mike Stone

LONDON/NEW YORK (Reuters) - Alan Schwartz knows how to play a long game. The executive chairman of boutique investment bank Guggenheim Partners spent almost 20 years cultivating Pfizer (PFE.N: Quote) boss Ian Read as a client. His strategy paid off handsomely when Guggenheim was named lead adviser for one of the biggest deals in history - Viagra-maker Pfizer's $160 billion acquisition of Botox-maker Allergan (AGN.N: Quote).

Schwartz, 65, had been working with Read since 2013 to find a European-registered company with which U.S. firm Pfizer could combine and shift its headquarters to a country with a lower tax rate, so-called inverting.

But their relationship stretches far further back, to the late 1990s, when Schwartz was a banker at Bear Stearns and Read was an executive working his way up at Pfizer, according to three people who have worked with Schwartz.

Such ties with key executives partly explain why small investment boutiques like Guggenheim can sometimes trump full-service investment banks such as Bank of America (BAC.N: Quote) for advisory roles on mega-deals.

Getting close to people in business development is very much part of the playbook of Schwartz, who has also spent the last two decades working closely with the likes of Verizon (VZ.N: Quote), Walt Disney (DIS.N: Quote) and Cablevision CVC.N.

He works with operational managers on a long-term basis - without doing deals - to discuss strategy and cultivate trust, according to the sources. Then, when they reach positions of power and an M&A opportunity comes up, an advisory role is the prize.

Guggenheim, whose partners rarely speak publicly, declined to comment.


Alan Schwartz, executive chairman of Guggenheim Partners, takes part in a panel discussion titled "The Entertainment Industry: A Billion Ideas in Search of an Audience" at the Milken Institute Global Conference in Beverly Hills, California May 2, 2012. REUTERS/Danny Moloshok