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NZZ (CH) features Asher Edelman

Of Wars and Culture
How Corporate Raider Asher Edelman became an art dealer and financier

If a notorious corporate raider becomes an art dealer and financier, it indicates a metamorphosis, maybe even a catharsis: Someone has renounced the world of filthy lucre, stock  markets and power and dedicates his life to beauty, the true and good. This story would have a morale. And many would like to hear such a story in times of the financial crisis and its repercussions.

But this is not the story of Asher Edelman. Edelman is a rebel on his own behalf – and with that has not only made a fortune, but also roughed up the area of Corporate Governance.

The art dealer Edelman is today, what he has also been as a corporate raider: mathematical, analytical, strategic, rational, focused, freedom-loving, concentrated, stubborn, opinionated and has an excellent intuition for where to be the first to make business with these qualities.

In the nineties, this intuition lead the US raider to Switzerland. He settled down in Lausanne together with his family and started attacks on local companies. The first target was the long-etsablished Swiss company Baumgartner Papiers. The attack went on for years. As a raider, Edelman looked for companies, the parts of which were worth more than their entirety; he broke up businesses and sold them in pieces. Or he tried to force a change in management in order to bring about a change of course.

In the sixties, after completing his economic studies, Edelman worked at first at Brokers and Investment Banks in New York. Mathematically gifted, he developed an interest in the rapidly developing financial markets theory, i.e. how at a given risk higher yields could be achieved via instruments like options or bundling of securities. He also learned, how to increase profits utilizing loans. He worked with the “father” of modern portfolio theory, Harry Markowitz, who later was awared the Nobel Prize. Edelman changed jobs frequently and took each new job under the prerequisite of being allowed to take two months of unpaid vacations every year; he spent a lot of time in Europe and in New York, where he was drawn into the world of artists, the world of friends like Andy Warhol.

And then he started in the eighties with his own money, other people’s money and especially with the money of banks, to raid companies. Edelman targeted approximately 40 companies, including Data Point, and Canal-Randolph. He became the pioneer of Leveraged Buyouts. Columbia University asked him to become a guest lecturer, Edelman called his course “Corporate Raiding: The Art of War.”  The film director Oliver Stone created the person of Gordon Gekko for his 1987 released film “Wall Street” inspired by Edelman.

Today, Edelman says he has never been part of the financial sector and as a raider had always fought against Wall Street and its associated companies. When too many in the USA tried to copy his business activities, the cosmopolitan (who says of himself he “resides nowhere”) moved to Switzerland in the nineties. He acquired the Swiss citizenship, sold part of his art collection to create the Musée d’Art Contemporain in Pully and brought retrospectives of Robert Mapplethorpe and Jean-Michel Basquiat to Europe.

The attempt to take over Baumgartner Papiers failed after all because of the resistance of some shareholders and a court ruling that denied voting rights to his share of over 25% of the company. Further raids followed such as the one of French luxury group Societé du Louvre and its majority shareholder, the Taittinger family. Then he returned to New York.

In retrospect, Edelman says, much of that was questionable. Not for moral reasons, but because activist-investors rarely had a better concept for a company. Edelman sits in a thirties leather armchair by Jean-Michel Frank in the hall of his four-story brownstone house on the Upper East Side in Manhattan. There he lives and works today as an art dealer and financier: the gallery in the first floor, the family lives upstairs. Modern art is to be found on the high walls. Between hundreds of art books casually mixed in family photos. On the table Edelman spreads tables, charts, statistical series and mathematical formulas. He is working on a new business model for the art market. Like in the eighties for companies, he now wants to increase liquidity and transparency in the art market with innovative financial instruments. He plans, for example, to offer sellers of art kind of an equity warrant; in case no buyer can be found during an auction at the defined price, Edelman would acquire the piece of art at a guaranteed price. He also plans the return to Switzerland. This time to Zurich, in his opinion after New York the second largest metropolis of the arts in the world.

This is a slightly adapted translation of the original article in German. You can read the original by clicking here.

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Category: Articles mentioning Asher, Arts, Financial

Comments (1)

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  1. Marc says:

    Asher, I am a follower of yours and admire your path, and new in the world of M&A and investment banking. Please tell me where I can get the core curriculum of your course “Corporate Raiding-The Art of War”. I am not a college grad and feel this would lend insight that would take years to accumulate. Grateful in advance…. Thank you.

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