Baseball, business and bones signal Guggenheim’s growth

Mark Walter, chief executive of asset manager Guggenheim Partners LLC, eschewed the usual pricey corporate art when his firm remodeled a couple of years ago.

Instead, he bought dinosaur fossils, including a 4-foot-high tyrannosaurus rex head for about $70,000 that sits near his office on the 49th floor of a Chicago skyscraper.

Buying big at the right price is a metaphor for the expansion that Mr. Walter is pursuing at Guggenheim, more than doubling assets under management to $160 billion since the end of 2010.

The growth, including an investment this year in the Los Angeles Dodgers, is drawing attention to the formerly low-profile firm, which has leapfrogged other, more established firms.

“We were kind of growing along pretty quietly without many of what I'll call splash-type events,” Mr. Walter said.

In the past several years, “the markets were in such turmoil, there were more opportunities,” he said.

“GOOD COMBINATION’

“They've had a good combination of smart acquisitions and bringing in the right people and growing it organically,” said Brien O'Brien, chief executive of Advisory Research Inc., a unit of Piper Jaffray Cos. that has done business with Guggenheim.

Unlike many financial firms, Guggenheim wasn't crippled by the financial crisis. That allowed it to acquire foundering companies such as Standard Life Insurance Co. and provide a base for refugees from larger Wall Street rivals such as Alan Schwartz, former chief executive of The Bear Stearns Cos. Inc. Mr. Schwartz established Guggenheim's broker-dealer and mergers-and-acquisitions advisory businesses.

“We did avoid, by and large — and our clients avoided, by and large — all the real negative investment categories during the collapse, which left us in a strong enough position to then be able to say yes to transactions,” Mr. Walter said.

Mr. Walter, 52, moved to Chicago from Cedar Rapids, Iowa, to attend Northwestern University Law School, from which he graduated in 1985. He founded Chicago investment firm The Liberty Hampshire Company LLC in 1996 and later teamed up with Peter Lawson-Johnston II, an heir to the Guggenheim family fortune, to create Guggenheim Partners, which would invest the scion's family money.

BUYING SPREE

During the past 12 years, Mr. Walter has brought together a range of businesses under one Guggenheim brand: asset management for institutional, high-net-worth and retail investors; insurance companies; global securities trading; aircraft leasing; and other businesses such as model-train maker Lionel LLC. The firm's private-equity arm bought everything from a controlling stake in the Dodgers to The Hollywood Reporter.

“We think the Dodgers is one of the greatest brands in America and one of the finest franchises,” Mr. Walter said.

Guggenheim, which has 650 of its 2,200 employees at a second headquarters it is expanding in New York and another 300 in Chicago, also bid for units of Germany's Deutsche Bank AG this year but stopped short of a deal.

“The price was maybe getting too big for Guggenheim,” said Independent Research analyst Stefan Bongardt.

Other expansion efforts are still on. The company is reportedly a bidder for Dick Clark Productions Inc., in competition with Guggenheim co-founder Todd Morley, who left the firm in 2009 to start G2 Investment Group LLC.

The quick expansion has made it difficult for Mr. Walter, who routinely travels to Chicago, New York and Los Angeles, to unify the firm's disparate parts with one strategic vision, according to some former executives, who asked not to be identified.

Several top executives, including chief operating officer Richard Goldman and marketing chief Marc Zeitoun, left this year, and others have departed in the past few years, including many who had been at Claymore Securities Inc., an exchange-traded-funds business Guggenheim acquired in 2009.

Claymore's former head of human resources, Lori Roberts, is suing Guggenheim in Cook County Circuit Court, alleging that Guggenheim low-balled Claymore's value to avoid paying her equity awards. The judge in the case said at a July hearing that he expects the case will go to trial.

Ms. Roberts declined to comment.

Guggenheim attorney Peter Silverman of Figliulo & Silverman PC disputed the claims in court.

Lynne Marek is a senior reporter at sister publication Crain's Chicago Business.