Profile: Bruce & Wendy Wasserstein and NYC’s Revival

Bruce Wasserstein, the financier and corporate takeover adviser, and his sister Wendy Wasserstein, the Pulitzer Prize-winning playwright and author, were among the most accomplished and famous New Yorkers of the late 20th and early 21st centuries.

Both died suddenly and somewhat prematurely — Bruce in October 2009 at the age of 61 of a reported aneurism and Wendy at the age of 55 in January 2006 reportedly of lymphoma, but not before they had reached the pinnacle of their chosen professions — Bruce in finance and Wendy in the theater.

Their success was achieved through a combination of shrewd insight and highly effective self-promotion, and the good fortune to live through a period of economic and social revival in New York City, in which they were active participants.

It is quite unusual that two siblings should obtain preeminence in such disparate fields. Like most successful prominent figures, Bruce and Wendy Wasserstein were a product of the times and place in which they grew up and lived — in their case New York City from 1950 to 2009. Their lives and professional successes, as well as their personal tribulations, are in certain respects emblematic of life in New York in this period, and also of the influences and attitudes forged from their immigrant Jewish parents in the preceding period.

Bruce and Wendy Wasserstein were born in Brooklyn in 1948 and 1950 to Morris and Lola Wasserstein. The family also included two older sisters: Sandra and Georgette. Sandra, who died at the age of 60 in 1997, was a highly-successful marketing executive. She was the first female product manager for General Foods, the first female head of marketing for American Express and the first female head of corporate communications for Citibank.

Morris Wasserstein had come to the United States from Poland in 1927. Undoubtedly aware that had he stayed in Poland he might have been killed during the Holocaust 15 years later, he would pass down to his children a deep appreciation of and gratitude for the opportunity to live in America. He would also have a fierce desire for his children to assimilate into America and New York and would instill in them a strong ambition to succeed at the highest levels of American and New York society.

In the early 1960s the Wassersteins moved their family from a large house on Avenue M and 23rd Street in Brooklyn to a rental apartment on Manhattan’s East Side at 150 East 77th Street. While the new location was closer to Morris’s office in the ribbon business and probably to better dance classes for Lola, it is hard to believe that the move across the East River was not part of Morris’ grand plan to provide an opportunity for his younger children, Bruce and Wendy, to more easily assimilate into the upper reaches of New York society. Whereas Bruce and Wendy had attended Yeshiva of Flatbush in elementary school in Brooklyn, Morris and Lola sent Bruce to the McBurney School, a now defunct but well-regarded elite private school founded by the YMCA of New York. Wendy attended the Calhoun School, a well-known progressive nondenominational school on Manhattan’s West Side. Having moved across the East River to Manhattan’s Upper East Side, where they lived the rest of their lives (except for brief sojourns in college and graduate schools), in a sense Bruce and Wendy never looked back.

The late 1960s and early 1970s, when Bruce and Wendy’s family lived on the Upper East Side and they attended college and graduate school, was a period of considerable social and economic upheaval. Bruce, like his older sister Sandy, attended the University of Michigan as an undergraduate and then went on to a joint law and business degree at Harvard where he worked one summer as one of “Nader’s raiders.” With his friend Mark Green (who was later New York City Public Advocate and almost Mayor in 2001) he wrote a book called With Justice For Some, attacking inequities in the legal system, and collaborated on a book called The Closed Enterprise System, an attack on the failure to enforce the anti-trust laws.

Rather than following her siblings to the University of Michigan, Wendy attended Mount Holyoke College and graduated in 1971.

This was not the best time to be graduating from college for a young New Yorker. Although Bruce, as a recent graduate from Harvard Law and Business School with a prestigious post graduate Knox fellowship, could look forward to a secure position at an elite Manhattan law firm, Wendy’s situation upon graduation was more problematic. The two years following her graduation would prove difficult, but were in certain respects critical to her future. Unable to find a paying job, she enrolled in a creative writing program at City University taught by the novelist Joseph Heller. After reading some of her work, Heller told her that she had the potential to be a great writer and encouraged her to pursue a writing career. Armed with an “A” average from City College and Joseph Heller’s enthusiastic recommendation, she was then accepted at the Yale Drama School, where she began in the fall of 1973.

Meanwhile Bruce, returning from a Knox fellowship to England where he wrote a dissertation on government merger policy, was hired as an associate by Cravath Swaine & Moore, one of New York’s most prestigious corporate law firms and the one that probably represented more Fortune 100 corporations than any other. Both Bruce and his father, Morris, viewed this position as a step up both socially and potentially economically. When Morris was Bruce’s age, a firm like Cravath would likely not have hired a Jewish boy like Bruce, who would have been consigned to the family textile business or strictly Jewish law firms. However, by the 1970s, under the influence of the civil rights movement and Title VII merit hiring regardless of ethnic background was more in vogue. As a result, Bruce was able to obtain an entry level position with arguably the top gentile law firm in the city. But that was only the beginning.

At the time Bruce joined Cravath, Wall Street, like the rest of New York’s economy, was in the doldrums. However, with low stock prices and an inflation-induced appreciation in the value of corporate assets, the conditions were ripe for a wave of corporate acquisitions and mergers that would cause a significant revival of Wall Street and the economy of New York City. Bruce and Wendy Wasserstein, the archetypal New York children from the Upper East Side, would soon be major beneficiaries of this revival and — in their respective fields — leaders of it.

As Bruce had written scholarly articles on mergers, it was logical that Cravath partner Sam Butler would assign him to work on such transactions. At the time Cravath was representing First Boston Corporation, an investment bank that had just hired Joseph Perella to head up an investment advisory service to do mergers. At the time, mergers and acquisitions (M&A) under the then changed economic and regulatory environment, was in a sense a new field in which very few had experience.

Previously most acquisitions were friendly, involved an exchange of stock and were handled by a company’s existing corporate advisers. However, the relaxation of antitrust and other regulatory restrictions, along with the depressed stock prices at which many corporations were selling, made an exchange of stock of the acquiring company for stock of the acquired company less attractive. But the low stock prices did open up a significant opportunity. An entrepreneur could, through borrowings or otherwise, acquire the stock of a target company fairly cheaply for cash, sell unnecessary appreciated assets to repay the debt and then restructure the rest of the corporation’s business to operate more efficiently.

Frequently this was done through a “hostile” tender offer in which the shareholders of the target would be offered a price per share that usually represented a premium over the trading price to permit the acquirer to obtain control. The acquirer would then frequently fire the company’s existing management and replace it with managers experienced in corporate restructuring who were loyal to the new owners. These efforts were invariably resisted by the existing corporate management, who frequently heretofore had felt invulnerable to attack.

There was soon a significant demand for professionals (lawyers, investment bankers, accountants, public relations experts, etc.) with expertise in effectuating such transactions. Young Bruce Wasserstein, who had been trained in law at Harvard Law School and Cravath Swaine & Moore, in business at Harvard Business School and by Morris Wasserstein at home, and in press relations on the Michigan Daily, had the ideal background for this kind of work. Even more importantly, it soon became clear that he had the ideal personality and the ideal analytical mind for such work. Shrewdly able to assess corporate situations and formulate strategy, he also had the brash confidence to project plans to others and at times intimidate adversaries, and no reluctance to work the 70-hour weeks that were required in such transactions.

After working with him on several transactions, Perella hired him to work with him at First Boston at twice the salary he was making at Cravath. As the co-head of the mergers and acquisitions group at First Boston, Wasserstein began to specialize in advising on hostile takeovers, which proved to be highly lucrative work. As he was involved in more and more major deals, his reputation as one of the premiere — if not the premier — experts in this area grew, and increasingly more business came to him and Perella. Corporate managers involved in a hostile takeover would want to be able to tell their Boards of Directors that they had hired the finest and most experienced professionals in the business, and to many the best in the business were Wasserstein and Perella. In 1988, he and Perella would leave First Boston to establish their own firm, Wasserstein Perella & Co.

Meanwhile in 1977, Wendy’s first full-length play “Uncommon Women and Others” was performed at the Marymount Theater on East 71st Street, a few blocks from where she had grown up, to rave reviews. “Uncommon Women” was reviewed by a theater critic for The New York Times and other papers just like a Broadway show, even though it never played on Broadway (it was later performed on PBS). The play essentially established Wendy, who was 27 at the time, as one of New York’s most promising young playwrights, and also showcased such young actresses as Glenn Close, Meryl Streep, Jill Eikenbery and Swoosie Kurtz. “Uncommon Women” was a play about a reunion of a group of Mount Holyoke graduates. The characters, including Holly Kaplan, the daughter of a Jewish New York textile manufacturer, were thinly disguised descriptions of Wendy and her best friends from college five years after graduation. The play provided a formula which she would consistently follow in her writing for the rest of her career.

Every four or five years thereafter until her death in 2006, Wendy would have a new play produced about a woman her age and the trials and tribulations of her life at that time. Probably the high point in this series was “The Heidi Chronicles,” first performed in 1989, about Heidi Holland, a 40-year-old art professor and strong follower of the women’s movement who finds that despite her significant professional success, she is somewhat stranded socially and emotionally. At the end of the play she decides to have a baby without a husband. This play, which is generally considered her best, won the Pulitzer Prize and a Tony Award. Thereafter she would be considered one of America’s leading female playwrights. Her fame created a significant benefit for Bruce, who often claimed that she was the famous one in the family.

From 1988 until 2000, Bruce continued to run Wasserstein Perella, which was one of the leading investment advisory firms specializing in M&A. Although with the rise in stock prices, the volume of mergers may not have been as robust as in the 1980s, the firm did a solid business. In 2001, it was itself acquired by Dresdner Kleinwort for a reported price of $1.4 billion in stock. The deal made Bruce — who had previously been only well-to-do — a very rich man.

After a purported falling out with Dresdner, Bruce was invited in 2002 to become the CEO of Lazard Freres, when Felix Rohayton and other leaders of that advisory firm thought the firm needed one of the “Great Men” of Wall Street to survive and continue into the next generation. Thus Bruce Wasserstein became one of the few figures from the takeover boom of the 1980s to survive intact into the 21st century. As the CEO of Lazard, he took the company public and forced the buy out of the old owners in a drive to remake the firm for the 21st century. By a combination of shrewd investments as well as his years of outsized Wall Street salaries, Forbes in 2009 listed his net worth as $2.5 billion and named him as the 147th richest man in America.

Certainly Morris and Lola were immensely proud of both Bruce and Wendy’s professional accomplishments. However, this professional success was not without a significant cost in terms of their personal lives. Wendy was never able to marry and have the nuclear family that she was taught to crave. In a case of life imitating art she at the age of 49 by in vitro fertilization gave birth to a child, Lucy Jane, and thus in her 50s became a single mother of a young child. She died of lymphoma in January 2006, leaving her seven-year-old daughter to be adopted by Bruce.

Bruce also had difficulties relating to family matters, but of a different kind. In the early 1990s he divorced Chris Parot, his second wife and the mother of his three children, and then married Claude Becker, a film producer 20 years younger than he was. He and Claude had three more children. He then divorced Claude and reportedly had an affair with a Columbia student with whom he had an additional child, and then in January 2009 married 28-year-old Angela Chao, the daughter of a prominent Chinese shipping magnate, nine months before his sudden death in October 2009.

Both Bruce and Wendy Wasserstein were in a most profound sense children of New York City in the late 20th century. They were native New Yorkers who lived there all their lives, and their upbringing both in Brooklyn and Manhattan undoubtedly contributed significantly to their later successes. There is also no question that Bruce and Wendy contributed significantly to the city’s success in the period from 1980 to 2009 in two important sectors of its economy. The unanswered question is whether their parents, or even they, would have viewed their great professional successes as worth the personal sacrifices they had to make to achieve them.

Photo of Bruce Wasserstein, Chairman and CEO of Lazard Freres, in 2008; and Pulitzer Prize-winning playwright Wendy Wasserstein at the Whitney Museum of American Art gala, 2000.

This article was first published by the Museum of American Finance.