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Perella Weinberg, Seeking Growth, Acquires a Rival Bank
The boutique investment bank Perella Weinberg Partners is taking an ambitious step for growth by buying a fellow bank known for its expertise in the oil patch.
The firm said on Monday that it was acquiring Tudor Pickering Holt & Company to greatly expand its expertise in energy transactions, at a time when independent advisory firms are battling to differentiate themselves.
“The importance of the energy sector is just huge,” said Peter A. Weinberg, a co-founder of Perella Weinberg and the head of its advisory business. “It’s a significant part of the M.&A. market, and it’s an important asset in the asset management business.”
The acquisition of Tudor Pickering Holt, word of which emerged earlier this year, comes as Perella Weinberg is seeking to build momentum. The firm was one of the principal architects of AT&T’s proposed $85.4 billion takeover of Time Warner.
Under the terms of the deal, Tudor Pickering Holt will become a subsidiary of Perella Weinberg Partners, though its energy practice will continue to operate under the Tudor Pickering Holt name. Robert B. Tudor III, a founder of the smaller boutique firm, insisted that the unusual structure does not hint at any potential culture clash between the two advisory outfits.
“We’re going to be one firm, but we at T.P.H. do have a unique and slightly quirky culture,” he said. “The Perella Weinberg guys have recognized that from the beginning, and they have no desire to change it.”
Mr. Tudor, who is the chairman and chief executive of Tudor Pickering Holt, will join Perella Weinberg’s executive committee. R. Maynard Holt will become chief executive of the Tudor Pickering Holt business, while Dan Pickering will become president and chief investment officer of the combined firm’s energy asset management division.
And Alexandra Pruner, Tudor Pickering Holt’s chief financial officer, will take on that role at Perella Weinberg Partners.
In some ways, the acquisition of Tudor Pickering Holt signifies a continued importation of former Goldman Sachs executives into Perella Weinberg. The investment bank began life with some of that firm’s DNA — Mr. Weinberg is a scion of a longtime Goldman family — and it has hired other alumni like Robert K. Steel, who is now Perella Weinberg’s chief executive, and Bruce Mendelsohn, who previously led restructuring at Goldman.
Both Mr. Tudor and Mr. Holt previously worked at Goldman, with Mr. Tudor having worked in the Wall Street firm’s London office alongside Mr. Weinberg.
In interviews, executives from Perella Weinberg and Tudor Pickering Holt said that they had kept in touch since both firms were founded roughly a decade ago. (Mr. Tudor said that he had even discussed starting an energy business within what became Perella Weinberg.) But it was not until within the last two years that Mr. Tudor and Mr. Weinberg began seriously discussing whether the two should become partners.
Though the acquisition is being announced as oil prices are in a slow recovery, Mr. Steel said that his firm was not simply trying to time any cycles in the energy market.
Financial details of the transaction were not disclosed, though executives from the two firms said that none of Tudor Pickering Holt’s executives cashed out and instead rolled over their holdings into Perella Weinberg. Some of Perella Weinberg’s outside investors, including an investment arm of Qatar, helped finance Monday’s transaction.
For Tudor Pickering Holt, the deal will allow the business to grow outside North America, particularly given Perella Weinberg’s ties to the Middle East, and expand into areas like corporate restructuring.
“We view this as a natural progression as we try to grow our business,” Mr. Tudor said. “We felt we needed a partner to help us grow and fill in holes.”
And for Perella Weinberg, further benefits included adding Tudor Pickering Holt’s nearly $2 billion of energy assets to its own $10 billion asset management business. The energy boutique will also bring a robust research team, which produces a widely read daily analyst commentary on the energy industry, and a sales and trading arm that caters to clients. Mr. Weinberg and Mr. Steel said that they would study whether those offerings could be expanded to other industries that Perella Weinberg focused on.
“What I think we’ll do is learn more about this and see if we can extend this into other aspects of what we do,” Mr. Steel said.
Tudor Pickering Holt is among Perella Weinberg’s biggest acquisitions to date, and it could lead to yet more takeovers of other advisory or asset management businesses, Mr. Weinberg added.
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