Lunch at The Four Seasons with: Peter J. Solomon
Published by The New York Sun on 2006-03-03
Peter Solomon says he's doing investment banking the old-fashioned way.
"My main business is giving advice to clients so that they can make money," the founder and CEO of Peter J. Solomon Company, said yesterday. "That means advising on mergers and acquisitions, of course. But we're an investment bank, not a hedge fund. Major firms on Wall Street make far more money investing for themselves these days than they do in advising their clients."
He was once vice chairman of one of those institutions himself - the venerable Lehman Brothers. Among his titles there was chairman of the firm's merchant-banking division, and co-chairman of its investment banking division. That polished Mr. Solomon's reputation in the financial community as an accomplished deal maker.
Mr. Solomon has another enduring reputation that he values even more.
"Yes, I am proud of it - integrity, competence, experience," he said.
His experience includes being widely noted as the wuenderkind of Mayor Koch's administration. The mayor hadn't known Mr. Solomon when he selected him to be his deputy mayor of economic policy and development. Mr. Solomon was also chairman of the New York City Health and Hospital Corporation, which operated 17 municipal hospitals.
"To this day I don't know why Ed Koch tapped me," Mr. Solomon said.
"Haven't you asked him?" the reporter said.
"You know Ed Koch, he doesn't tell you these things," Mr. Solomon said.
His companion at lunch was Diane Coffey, who'd served as the mayor's chief of staff.
The reporter looked inquiringly at her.
But Ms. Coffey had learned her management lessons well at City Hall.
Besides, she now works with Mr. Solomon as a managing director at his investment bank.
(Let it be noted for the record that Mayor Koch once said to Mr. Solomon: "You travel light, and you get things done." But that was after the latter had distinguished himself at City Hall.)
Mr. Solomon founded his eponymous investment bank in 1989. Earlier, he'd been counselor to the United States Treasury during the Carter Administration.
"So you've been offering advice for a very long time," the reporter said, unintentionally stating the obvious.
"People always need good advice," Mr. Solomon said, diplomatically indulging the question. "Good advice comes with detailed knowledge of issues, especially at this time of globalization. The larger firms surprisingly enough don't have the kind of experience that you'd expect of them."
Mr. Solomon's own experience in national and global issues is continually embellished by travel. His journeys enable him to spot promising investment opportunities often before they appear on the international radar.
India is a case in point.
"I knew years ago that India had the potential of becoming an economic power," Mr. Solomon said. "On one of my first trip there many years ago, when socialism was still the governing ideology, I asked some businessmen why it was that things weren't working out economically."
One of the businessmen said, "If we don't get it right in this life, we'll get it right in the next life."
The reference, of course, was to the Hindu belief in reincarnation. It was also an allusion to what the Indian economist Raj Krishna often referred to as the "Hindu rate of growth" - India's annual economic growth that hovered around 3.5% between 1950 and 1980 - that resulted from discouraging the free market and foreign investment, and placing excessive emphasis on state-led industrialization.
"But you know what has happened?" Mr. Solomon said yesterday.
He paused, and then issued a smile that slowly spread across his face.
"What happened is that the Indians decided they would get it right in this life," Mr. Solomon said.
That happened partly on account of efforts of New York-based economist Jagdish Bhagwati, who persuaded his close friend - and former Oxford University roommate -- Indian Prime Minister Singh to liberalize the economy and embrace the free market.
India's annual growth rate has surged to 7%, a development that was lauded in New Delhi yesterday by President Bush.
Mr. Bush promised that the economic corridor between America and India would be strengthened. But Mr. Solomon saw India's prospects well before the Bush administration.
"The middle class in India alone is bigger than the entire population of Western Europe," he said. "India is the free world's biggest market."
One Indian company that he spotted was Pantaloons, a retailer. Its stock has soared 1800% in the last three years.
"And there are other such stories of success," Mr. Solomon said. "This is just the beginning for India. It's the most exciting economy in the world today. What a wonderful place. What a wonderful thing to have happened for America. Talk about George Bush getting lucky!"
But surely his prognosis about India was predicated on more than prescience, the reporter asked?
"I believe that in life, there is a solution for every problem," Mr. Solomon said, addressing the question with a trademark preamble.
"I always start dealing with a problem from the human side of the issue," he said. "My technique is to assume that everything starts with a person.
Financial issues are relatively easy to resolve. But people are more complicated."
That might be perceived as stating the obvious, but Mr. Solomon's people skills are legendary in New York. At lunch, for example, he was frequently greeted by other diners as though he were an ambassador. For each person, Mr. Solomon seemed to have a special, knowing comment, delivered with easy diction, and sometimes with uproarious laughter.
"Let's talk later - I may have a deal for you," one diner said.
"How's Susan?" another diner said, referring to Mr. Solomon's wife who, like her husband, is an active philanthropist.
"How are the bees?" came another question, a reference to Mr. Solomon's fabled bee-keeping hobby.
"How's the book collection?" still another diner said, referring to Mr. Solomon's extensive collection of children's books.
"How's the theater?" asked someone else, referring to the Manhattan Theater Club, where Mr. Solomon has been chairman for the last eight years.
"How's Cambridge?" the reporter said, in a feeble attempt to ferret out the politics behind the recent resignation of Lawrence Summers from the presidency of Mr. Solomon's alma mater, Harvard University, where he served on the Board of Overseers.
Isn't his BlackBerry overflowing, the reporter said, not necessarily expecting an answer?
"Friendship, and a network of friends and acquaintances in business create opportunities because people know you and feel comfortable with you," Mr. Solomon said. "For me, it's mostly a matter of trust - and the enjoyment that comes from doing business with friends. But friendship isn't for me necessarily with people who are powerful or can help me.
"My friends are people I have met fishing, in the arts, politics, camp, dancing school, college and elementary school pals," he said. "Some of them have more money and recognition than I, and some have less. We share common interests and values. For me success is partially retaining the respect and affection of my friends as well as my business colleagues."
Senior Writer and Global-Affairs Columnist