Few financiers’ memoirs open with more drama than Felix Rohatyn’s Dealings: A Political and Financial Life, published this month by Simon & Schuster. It describes how the Rohatyns, well-to-do Austrian Jews living in Paris, escaped Nazi-occupied France by cramming possessions into their car and piling mattresses on the roof, and joining a caravan of refugees bound for the Spanish border. They might not have made it across but for a guard’s choosing to take a cigarette break and wave them through rather than examine their papers. Felix was just 12.
Rohatyn spent his teenage years in New York City before earning a BA in physics at Middlebury College. Upon graduating in 1949, he got a job through family connections at Lazard Freres & Co.
He hadn’t intended to become a banker — his father owned a brewery. But he took to investment banking and, in particular, deal making under the tutelage of Lazard’s formidable CEO Andre Meyer. (Rohatyn confides that in all their decades working together, he unfailingly addressed him as “Mr. Meyer” or “Monsieur.”)
A rainmaker’s rainmaker, Rohatyn, now 82, played a pivotal role in Lazard deals over five decades. For instance, he engineered most of ITT Corp.’s many acquisitions.
His toughest financial assignment, however, came when he volunteered to lead a bailout of his adopted city and later served as the longtime chairman of New York’s Municipal Assistance Corp. (MAC), set up in 1975 to help Gotham stay afloat.
Preferring deal making to managing, Rohatyn declined to become CEO of Lazard. He left the bank altogether in 1997 when president Bill Clinton appointed him ambassador to France.
He recently returned to Lazard as special adviser to chairman and CEO Kenneth Jacobs. Last month Rohatyn sat down with Institutional Investor Staff Writer Imogen Rose-Smith to talk about capitalism, the global economy and his current concerns.
Institutional Investor: You say in your book that capitalism got away from itself — focusing more on making profits than on what’s best for clients.
Felix Rohatyn: Capitalism, if we just let it go on unchecked, can lead to a very bad end. While I was in France [as ambassador] in the late ’90s, I tried very hard to promote modern American capitalism to the French. And I started thinking about it more and more, and reading a lot about the New Deal and the history of this country.
What was your conclusion?
That is when I really began thinking of myself as a Democrat.
At MAC, you unsuccessfully pressed the fiduciary for New York State’s pension funds, Arthur Levitt, to buy New York City bonds. Do public funds have an obligation now to buy the bonds of distressed cities or states?
I’m still not sure of the answer to that. There is clearly an argument to be made that pension funds, and similar instruments, belong to their shareholders and that Levitt was right. He was following what he saw as his fiduciary responsibility — but somewhere there must be a higher moral responsibility.
How do you see the global economy right now?
I have a sense that we are running out of capital. There is not enough capital in the world to deal with the demands that are being made on it. If true, that means that money is going to be more expensive.
What are your current concerns?
I’ve been spending my time on infrastructure issues. This is an investment that is hugely important to our nation. Every day we are falling behind in infrastructure investment. That just can’t be for a major Western country.
