Bloomberg Chooses a Friend to Manage His Fortune

Date: Wednesday, January 16, 2008
Author: Andrew Ross Sorkin, The New York Times

Mayor Michael R. Bloomberg has chosen the firm of a longtime friend, Steven Rattner, a financier who moves among New York’s power elite, to manage the investments of his multibillion-dollar fortune.

The selection, which was announced on Tuesday, comes amid speculation that Mr. Bloomberg is considering a run for president. It is part of the mayor’s effort to bolster his charitable giving and to be able to expand his wealth through more aggressive investments, including hedge funds and publicly traded stocks.

Until now, the City Conflicts of Interest Board had prevented him from making such investments. Under guidelines approved last month, the mayor’s portfolio will be managed somewhat like a blind trust, though he will have control of and access to certain investment decisions.

Mr. Bloomberg’s decision to put his fortune in the hands of Mr. Rattner, a former deputy chairman of Lazard who now runs his own investment firm, the Quadrangle Group, confers a new level of status to a man who has long played the role of adviser in New York’s political and charity circles.

The new assignment will also put Mr. Rattner and his relationships throughout the city under a spotlight because of his responsibilities in overseeing Mr. Bloomberg’s wealth, estimated at $5 billion to $13 billion, some of which the mayor could use to finance a presidential campaign.

Last year, the mayor and his Bloomberg Family Foundation gave away more than $200 million.

A spokesman for Quadrangle declined to comment.

Mr. Rattner has been an enthusiastic supporter of Senator Hillary Rodham Clinton’s presidential campaign, and speculation has long swirled about his own political ambitions. His wife, Maureen White, is a co-chairwoman of finance for Mrs. Clinton. The Rattners have played host to a series of events for Mrs. Clinton over the last year and have given her campaign $4,600, the maximum allowed.

Mr. Rattner, who began his career as a journalist at The New York Times, may not have been an obvious choice for the assignment. He is known more for brokering and investing in media deals — that is how he first met Mr. Bloomberg more than a decade ago — than as a money manager.

His firm focuses on private equity deals in the media, telecommunications and technology industries. The firm has investments in Metro-Goldwyn-Mayer Studios and the publisher of Maxim magazine, among others. In recent years, it has also added a series of hedge funds.

Mr. Rattner is a former trustee of Cablevision, a former chairman of the Educational Broadcasting Corporation — Channels 13 and 21, New York’s public television stations — and a former trustee of the Metropolitan Museum of Art.

Within investment circles, word has begun to spread that Quadrangle is canvassing to hire a chief investment officer to be in charge of the mayor’s day-to-day portfolio.

People who have been approached about the job say the firm is looking for people who have managed large endowments and other funds; they estimated the fund’s size at “several billion dollars.” These people also said that Quadrangle was looking to hire as many as 20 additional investment professionals to manage the fund.

Under the rules approved by the City Conflicts of Interest Board in December, the mayor is allowed to advise the investment firms about categories of investments and to hire or fire managers based on reports about their performance. But the mayor must receive no information about the specific holdings in his or the foundation’s accounts and must not know the identities of the managers.

The mayor has been criticized for seeming to have too much involvement in the day-to-day activity of his business. He was also criticized when Deputy Mayor Daniel L. Doctoroff said that he was stepping down to become president of Bloomberg L.P.