Just six months after falling on his sword in a brutal battle for control of Morgan Stanley Dean Witter, “Mack the Knife” has returned to Wall Street as sharp as ever.
For John Mack, 56, his new job at the helm of Credit Suisse First Boston marks a graceful return to Wall Street – and could spell sweet revenge on his former colleague, Morgan Stanley CEO Phil Purcell.
Mack quit his post as the second-in-command at Morgan Stanley in January after a bruising power struggle with Purcell for the CEO spot.
Mack’s move has Morgan Stanley senior management bracing for what could be a spate of departures. “If I were Phil Purcell, I’d be worried,” noted one observer. “I’m sure he has a big budget to make hires. He can put a real dent in Morgan Stanley’s business.”
In a conference call with analysts and reporters, Mack said he had no plans to raid his former firm. “There are no large teams coming to CSFB; all the teams are here,” the new CSFB chief exec contended.
Nevertheless, industry wags have little doubt that Mack will try to cherry pick key executives from his former firm. “Mack is a highly respected manager who has the ability to attract the best and the brightest and commanded a lot of loyalty at his former firm,” noted one financial services headhunter. “He’s going to want to bring his people over.”
Mack is expected to woo Peter Karches, his former top aide who oversaw the firm’s institutional business at Morgan, and Dwight Sipprelle, the head of high yield, to join him. Karches and Sipprelle resigned last August as part of a shake-up in the division.
Meanwhile, Mack is likely to see defections from some of CSFB’s “Wheat-ies,” such as Brady Dougan, head of equities at CSFB. Dougan, a close friend of Wheat from their days at Bankers Trust, was believed at one time to be Wheat’s heir apparent.
“Almost every single member of senior management at CSFB is vulnerable,” said a Wall Street executive close to CSFB.
Mack, a native of North Carolina and the son of a Lebanese immigrant, joined Morgan Stanley in 1972. A 27-year veteran of Morgan Stanley, he rose through the fixed-income ranks, becoming a vice president in 1976 and a principal the following year. Mack is largely credited for the wildly successful 1997 merger of Morgan Stanley with Dean Witter.
The move forged one of Wall Street’s biggest firms, combining Morgan Stanley’s might as an investment bank with Dean Witter’s ability to distribute stocks and bonds to small investors.