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Practice Management > Building Your Business

Alexandra Lebenthal Left Her Family Firm, and She's ‘Loving It’

By Jane Wollman Rusoff

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More than three years ago, Alexandra Lebenthal walked away from her famed family company that was “built by bonds,” as dad Jim Lebenthal used to brag in commercials. But she was “relieved and happy” to relinquish all control, the former CEO tells ThinkAdvisor in a candid interview.

Her new frame of mind wasn’t too surprising. At the time, the firm, of which she took the helm in 1995 and owned since 2007 as Lebenthal Holdings, was beset by serious financial and legal woes. The final blow was the failure to seal a last-minute deal for an investment bank to buy a 49% stake in the company.

Flash forward to September 2020. That’s when, in the middle of the pandemic, Lebenthal, 56, embarked on a brand-new chapter: investment bank employee.

At Houlihan Lokey, she leads an initiative to help female business owners secure late-stage growth capital or sell their companies.

Her mission as a senior advisor is to brand Houlihan as the foremost investment bank for female-led companies.

The way she sees it, her heavy experience leading a woman-owned firm makes her highly qualified to empathize with female entrepreneurs. Many lack trusted relationships in the financial services world that address business growth, says Lebenthal, who is married to Jay Diamond, managing director of Guggenheim Partners.

In the interview, noting her “branding and marketing heritage” — Jim Lebenthal was a master pitchman — she describes how she came up with the new concept and approached Houlihan with it.

When Lebenthal exited her family company, she was casting aside her legacy: her paternal grandparents founded the firm in 1925; in 1963, her father took over, and with a keen talent for promotion, made the muni bond company famous.

But decades later, dealing with a dire situation, his daughter was “deeply unhappy with [her] daily existence” and felt she had little choice but to move on, as she relates in the interview.

Ten years earlier, Lebenthal had relaunched the firm, buying back the Lebenthal name (for $1,000) after selling the company six years before to Advest, which was subsequently acquired by AXA SA, then sold to Merrill Lynch in 2005.

By 2012, Fortune magazine had dubbed Lebenthal “the New Queen of Wall Street.” Two years later, under Lebenthal Holdings, she introduced Lebenthal Wealth Advisors. But only two years after that, amid management shakeups and advisor defections, she closed the struggling division.

Around that time, messy lawsuits and other acute financial issues emerged. When she stepped away in June 2017, so did her brother James Lebenthal, who was CEO of Lebenthal Asset Management.

Subsequently, in 2019 rights to the Lebenthal name and logo were acquired by Michael Hartzman and Dominick Tavella. They are now presidents, respectively, of Lebenthal Financial Services and Lebenthal Global Advissors.

In the interview, New York City-based Lebenthal calls the painful years-long wind-up “full of heroes and heroines and villains and villainesses”; and she hardly relishes looking back.

She began in Kidder Peabody’s municipal bond department in 1986. Two years later she joined her father in the family business and by 1995, was running it.

ThinkAdvisor recently interviewed Lebenthal, who was speaking by phone from Long Island. About challenges inherent in branding a firm as the go-to bank for firms led by women, she argues: “If you just put out a pink sign that says, ‘Investment Banking for Women,’ it is not necessarily going to work.”

Here are highlights of our conversation:

THINKADVISOR: After helming your family business a total of 22 years, how do you now like being an employee?

ALEXANDRA LEBENTHAL: I’m loving it. I’m grateful for the times I had running companies. But that has many aspects that take a toll: managing people, dealing with parts of the business that keep you up at night. Now I’m focusing on what I’m passionate about and feel I’m good at, and what will really make my heart sing and make a difference.

What are you passionate about? 

Being the trusted advisor of women with female-led companies.

What did this new venture stem from?

I was thinking: What’s the next chapter for Alexandra Lebenthal? I met with female founders raising capital for small companies. What kept coming up as the theme was that they had very few, if any, relationships in financial services that address their business growth. I saw an opportunity for someone, or a company, to start working with them.

But you’re not concentrating on startups right now. Why is that?

I realized that there were enough larger — mid-market — female-led companies to create an investment banking platform around to help fund them or do straight M&A. The women may be seeking late-stage growth capital or on the point of selling their companies.

What else prompted you to think this was a sound concept?

There were meaningful steps being taken by some financial institutions — such as Goldman Sachs creating “Launch with GS” two and-a-half years ago — to focus on funding female-led businesses. That led me to believe that there was an opportunity for another [firm] to take a step — in a different way.

There are many banks. Why did you take your concept to Houlihan Lokey?

One reason is that Houlihan is where so many female-led businesses fit in terms of size because it mostly focuses on the mid-market sector. So that would knock out the JPMorgans and the Bank of Americas of the world since their banking businesses are for much larger companies.

What’s the chief challenge to your new mission?

This is a big effort to create a brand, an identity around Houlihan as a bank that has a focus on female-led companies. If you just put out a pink sign that says, “Investment Banking for Women,” it’s not necessarily going to work.

How will you create that brand?

This year the challenge is to build the identity and presence in the market so that ultimately a woman who is at the point of needing an investment banker will say, “I want to go to Houlihan” or, at least, “Houlihan is on my short list.” But that will take some time.

What do you bring to the table that’s different?

I’ve been the client of investment banks four or five times over the course of my career. So I know what it’s like to go through the very emotional process of a transition when it’s your company — as opposed to thinking about things from the banker’s side. My role is to be the person the [woman] CEO can rely on during this emotional process.

Why did your leave your family firm three years ago?

There was drama around it, but I try not to look back. It’s more appropriate for a Netflix special that you want to binge-watch and keep clicking on the next episode to find out what happens. It’s so full of twists and turns and heroes and heroines and villains and villainesses. All I can do is have a sense of humor about it.

What was the core problem? The firm wasn’t turning a profit?

Part of it was tremendously successful — the capital markets business — but not the wealth management business. For a number of years I’d wake up every day dreading having to go to work because I didn’t enjoy what I was doing. I was very unhappy.

What finally triggered your decision to exit?

I came to the conclusion that it was time for me to be happy. If I was so deeply unhappy with my daily existence, then I had to focus on what was next. Once I made that decision, I felt a sense of relief and joy.

Does the family firm name exist in any form now?

It does. The name was sold. I don’t really know anything more than that. It has something to do with a firm on Long Island [Lebenthal Financial Services and Lebenthal Global Advisors], but I’m not aware of any details.

At Houlihan, do you have interaction with financial advisors?

The firm does; and I will, hopefully, in the future. This year I’ll be working with advisors that have female clients who have companies that need selling, as well as some of the banks and advisory firms that have a special focus on women. Houlihan has relationships with a couple of wirehouses and a couple of independent platforms whereby, if any of their financial advisors have clients that need selling, Houlihan will take on the investment banking assignments.

What can the industry do to attract more female financial advisors?

That question has been around for way too long! Instead of large financial advisory companies saying, “We’re going to be the leader in female investing. Here’s what we’re going to do, and here’s how we’re going to do it,” they do a research report on the size of the women’s market.

What should they do instead?

There’s an opportunity for any of the big banks or independent platforms to say, “We’re going to own this market, and here’s how we’re going to do it and by when” [specific date]. Once you do that, you’ll end up attracting more women [FAs].

Your father Jim Lebenthal died six years ago at 86. What’s your capsule description of him?

He was incredibly vibrant, even at 86. He was 100% about living and being excited and happy and doing what he always wanted to do. During the months of COVID [stay-at-home orders], it would have been impossible to keep him inside. He would have been constantly thinking and writing and having great concerns about the bond world, which, obviously, has challenges now. He would have been out videotaping something and doing all sorts of stuff.

Years ago, you were labeled a socialite because you were on the boards of cultural institutions and often attended galas and events wearing fancy gowns. Do you miss all that?

No, I don’t. It was wonderful for about a decade, but it got to be more of an obligation than a joy. To me, a socialite was someone who was only thinking about going out and dressing up. But I spent the vast majority of my day doing something completely different. When I went out, a lot of it was for business reasons, anyway. So, many of my contacts and relationships came from going to events. I still have my dresses downstairs.

You relaunched the family business in 2007. You started your job at Houlihan amid the pandemic. Do you deliberately plunge into new ventures during difficult times, or is that just a coincidence?

[Laughs] Maybe it’s part of my upbringing: It always seems more appealing to take the road less traveled.

— Related on ThinkAdvisor:

Jane Wollman Rusoff

@jrusoff2

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