Richard Jenrette, a co-founder of the first New York Stock Exchange member to go public, the investment bank Donaldson, Lufkin & Jenrette, died April 22 in Charleston, S.C. He was 89.
The cause was complications from cancer, according to Margize Howell, co-president of the Classic American Homes Preservation Trust. Mr. Jenrette founded the trust in 1993 to preserve architecturally significant homes he acquired, including Millford Plantation and Roper House in South Carolina, Ayr Mount in North Carolina, and Edgewater in New York, which he purchased in 1969 from author Gore Vidal.
With William Donaldson and Dan Lufkin, fellow graduates of Harvard Business School, Mr. Jenrette opened the firm known by the shorthand DLJ in 1959.
It first made a name for itself by providing research on growing companies not then covered by most of its Wall Street competitors — firms such as Xerox, one of its first “buy” recommendations.
Before long, it had a client base loaded with pension funds, mutual funds and other institutional investors. “Institutions were paying massive sums in brokerage commissions and getting nothing back for it,” Mr. Jenrette recalled in Eric J. Weiner’s 2005 book about Wall Street, “What Goes Up.”
“So we offered them some real research for their commission fees. They were so tired of giving business to Merrill Lynch and other firms that they began to put business into us.”
DLJ grew as mutual-fund sales and its attendant commissions took off in the 1960s. Mr. Jenrette served as chairman starting in 1974 and as chief executive.
In 1970, the firm sold shares to the public, allowing the founding partners to turn some of their equity into cash. Mr. Jenrette said becoming a public company was a goal since the firm’s founding. It also ran counter to a New York Stock Exchange rule prohibiting members from going public. “Big Board Defied by Member Firm,” said the New York Times headline when DLJ announced its plan in 1969.
The NYSE could offer only limited resistance. Its leaders, “while appalled by DLJ’s gambit,” realized “that in order to continue financing the growth of the country’s great businesses, Wall Street needed more capital,” William D. Cohan wrote in a 2017 retrospective for Atlantic magazine. “The easiest and cheapest way for Wall Street to get the capital it needed was from the public, just as Wall Street’s corporate clients had been doing for more than a century.”
Other small Wall Street firms followed DLJ by going public in 1970, and a year later, they were joined by Merrill Lynch, Pierce, Fenner & Smith, then the world’s largest investment-banking firm. When Goldman Sachs Group sold shares in 1999, Wall Street’s conversion to public ownership was largely complete.
At DLJ, Mr. Jenrette succeeded Donaldson as chairman in December 1973 when Donaldson went to work for Secretary of State Henry Kissinger in the administration of President Richard M. Nixon.
Donaldson later chaired the Securities and Exchange Commission from 2003 to 2005.
In 1984, when DLJ was bought by Equitable Life Assurance Society, Mr. Jenrette was the sole original partner still at the firm.
He rose to chairman and CEO of Equitable. When the insurer faced a financial crisis in 1990, Mr. Jenrette cut $150 million in annual costs, sold 49 percent of the company for $1 billion to Axa SA and raised $450 million in an initial public offering that was the biggest demutualization of a U.S. insurance company.
Mr. Jenrette retired in 1996, and Credit Suisse Group AG bought DLJ in 2000.
In “The Contrarian Manager,” his 1997 book, Mr. Jenrette detailed his management philosophy of rendering competitors moot by doing things differently.
“You are creating your own market, your own niche where you can excel on your own terms,” he wrote.
Richard Hampton Jenrette was born in Raleigh, N.C., on April 5, 1929. He graduated in 1951 from the University of North Carolina at Chapel Hill. He served in the Army during the Korean War as a counterintelligence specialist, then graduated in 1957 from Harvard Business School.
He went to work in the research department of Brown Brothers Harriman, then became a portfolio manager. In his third year there, he was approached by Donaldson and Lufkin about starting a new firm. Mr. Jenrette said he was the “token non-Yalie” with the trio.
At DLJ, Mr. Jenrette became chief administrative officer, responsible for setting up clearing and execution procedures. He edited research reports and set up what became the firm’s investment arm, Alliance Capital Management LP, which in 2000 acquired Sanford C. Bernstein Inc. to form AllianceBernstein Holding LP. To help create DLJ, Mr. Jenrette borrowed his share of partnership costs from friends. The three founders also tapped 10 former classmates to chip in capital.
Mr. Jenrette recalled: “I remember someone I worked with at Brown Brothers said to me, ‘Dick, you’re crazy. Don’t you know there have been no new firms since 1932?’ But I am a contrarian, so the idea appealed to me.”
Mr. Jenrette’s partner, William L. Thompson, died in 2013, according to the New York Times. He had no immediate survivors.
— Bloomberg News