Alex Seippel, Founder, the Roundstone Group
Victor Basta, Managing director, Europe, Broadview
If ever in the life of an investment banker there comes a time for a self-congratulatory pause, Ruggero Magnoni, one might think, has arrived at his.
Not only can he reflect on the success of Olivetti’s audacious assault on Telecom Italia, for which he was a prominent adviser, he has now been promoted from head of corporate finance to one of two (with Raymond Seitz) vice-chairmen of Lehman Brothers, Europe.
But Magnoni is not about to slow down. Our meeting, which at short notice he has squeezed into a crowded day, is punctuated every couple of minutes by heads poking round his door, speaking various southern European languages. As he juggles the simultaneous demands of various meetings and conference calls, his manner stays calm, focused, engaging.
Such qualities, combined with Magnoni’s financial cunning and efficiency, were no doubt noted by the former Shearson Lehman chairman, Peter Cohen, when he first met Magnoni in Tokyo in 1986.
The strategists at American Express, Shearson Lehman’s owners, had singled out Italy as the country in Europe where the group could make the most money, and soon Cohen, who hit it off quickly with Magnoni, was beseeching the young Italian to open an office for Lehman there. “At first I said no,” Magnoni recalls. “I didn’t want to go back to Italy just yet. But then he came back with an offer I couldn’t refuse.”
Lehman’s connections with Italy stretched back to 1946, when Bobby Lehman, together with Banca Commerciale Italiana, helped found Mediobanca. Lehman sold its stake in Mediobanca during the 1960s, but after Lehman suffered heavy trading losses in the early 1970s, BCI bought a substantial stake and the chairman of BCI gained a seat on the Lehman board. “There is,” says Magnoni, “a lot of Italian in our DNA.”
In Italy from 1987, Magnoni was given the resources to hire the best talent. His recruits included Vittorio Pignatti (now Lehman’s top European M&A brain, and also closely involved with the Olivetti/Telecom Italia deal). Magnoni worked on deals that swiftly re-established Lehman’s name in Italy, including the privatization of BCI and the first round of privatization of state telephone company Stet.
At the same time he set up Italy’s largest mutual fund company (sold last year to Deutsche Bank for a 1,000% profit), and started Finanza Futuro (also sold to Deutsche Bank).
Lehman also became the second-largest shareholder of Carlo de Benedetti’s holding company, Cofide, and in 1989 cofounded Omnitel, a joint venture with CCIL and Olivetti, to seek to obtain a licence to operate cellular phones in Italy. The licence was granted in 1995, and Lehman sold its stake for a huge profit.
Such experience will be invaluable as Magnoni takes charge of Lehman’s merchant banking in Europe, which includes responsibility for allocating 25% of Lehman’s $2 billion fund Capital Partners Four. “We want to step up our investment programme in Europe with a view to setting up a specific European private equity fund,” he says – with a particular focus on telecoms and media.
One of eight children of a “paternalistic, Catholic family”, Ruggero Magnoni was born in Barcelona in 1951 to a half-Catalan, half-Italian mother and an Italian father, who owned a law firm with offices in Milan and Barcelona.
The family moved back to Milan shortly after Ruggero was born, and he was educated there, graduating summa cum laude in business from Bocconi University in 1974.
Shortly after, Magnoni was, as he puts it, “an intimate spectator” to the collapse of one of Italy’s largest private-banking empires. One of his brothers had married the daughter of Michele Sindona, and Ruggero was asked “in a very marginal way” to advise Sindona’s board on ways to increase the capital of its troubled listed banks. “But of course,” he remembers, “the whole thing collapsed.” He then decided to leave Italy for a while. “I felt I wouldn’t be given important opportunities, that I was somehow tainted – not that I had done anything wrong.” “It was also,” he adds, “the time of Red Brigades galore and I felt I needed to go back to school.”
With a scholarship from Peat Marwick, he did an MBA at Columbia University, New York. When Kuhn Loeb’s people came to the campus, the young thruster told them: “You cannot afford not to interview me” – even though he had no residency papers. “I suppose I was a typical ‘wop’, but they seemed pleased to see this aggressive young Italian and called me back.” Magnoni was Kuhn Loeb’s only hire that year on Wall Street.
By the end of 1977, Kuhn Loeb had sold itself to Lehman Brothers in a stock-for-stock merger, and in 1983 the merged firm was in turn sold to Shearson. Magnoni had narrowly missed partnership of Lehman Brothers Kuhn Loeb, but he was, like others in his position, given a “consolation prize” and asked to stay on.
From 1983 until 1987 Magnoni became successively head of corporate finance, Latin America, where he specialized in aircraft financing, of international equipment financing and leasing, and of international private placements.
In the last capacity he helped American Express and Shearson Lehman refinance its buildings in New York using banks in Tokyo – and it was there that he met Peter Cohen, who had come to open an office there.
In his new position, together with his investing responsibilities, Magnoni retains his closest advisory accounts – including Olivetti/Telecom Italia, Canal+, BCI (which he has advised on its recent merger dealings) and the Munich-based Kirch Media, which owns the largest library of TV programmes in the world. In May, Lehman joined Prince Alwaleed bin Talal and Silvio Berlusconi’s Fininvest, with a total investment in Kirch of Dm1.25 billion ($668 million – the first outside equity investment in the company. Magnoni plans to take Berlusconi’s football club AC Milan – of which he is an ardent fan – public next year.
Although himself an enthusiastic soccer player, Magnoni is rarely asked to play these days because “I can’t commit”. While he jets around the world, his wife and two teenage sons live in Milan, preferring “to be alone there than to be alone in London”. If he ever stops banking, a move into European politics is possible. For the moment, though, he keeps his allegiances to himself. Philip Eade
