In San Diego last week, James Dunne 3d showcased his firm for clients and customers at its annual West Coast banking conference. Just as much, he was showcasing himself a man pulled by tragedy into a leadership role, determined, even eager, to keep Sandler ONeill & Partners LP independent and make it stronger than ever.
Hes also determined not to stick around forever.
I made a commitment to myself that I would go in five years, the 45-year-old Wall Street veteran says. I will look at it as a failure if I am still senior managing partner in five years. It will be time for someone else to do it.
Can Mr. Dunne meet his goals and his deadline? His leadership skills will be tested as never before, as will his resolve. This is someone who never wanted to be a leader for five minutes, let alone five years, in the best of times. He was content as the lieutenant running a tight shop with little need to set long-term goals or cultivate people.
The human side is more difficult for him to deal with, says Richard Bookbinder, a managing member of Bookbinder Capital Management LLC in New York and one of Sandler ONeills founding partners. He has not really dealt with that previously. That is something he is worried about.
Mr. Dunne is on the spot at his firm and in the spotlight in general because of the tragic events of Sept. 11 when his small firm lost 66 employees at its World Trade Center headquarters. Among those killed were Herman S. Sandler and Christopher Quackenbush, respectively Mr. Dunnes predecessor and the investment banking chief. Together, they were the public face of the firm and comprised, with Mr. Dunne, its executive committee.
Mr. Dunne was, as he puts it, Dr. No to Mr. Sandlers Daddy Warbucks; the profane disciplinarian to Mr. Quackenbushs gentleman. Mr. Dunne perhaps more than anyone else in the firm bought into the Master of the Universe image because his hard driving attitude made him a winner. For him, working at the house that Sandler and ONeill (and others) built was like taking the field way uptown at the House that Ruth Built he got a charge out of being literally on top of the financial world in the Twin Towers.
He would take off Fridays to golf with Mr. Sandler and Mr. Quackenbush, but his passion for that game has taken a backseat to the goal of getting Sandler ONeill back to its pre-9/11 stature.
I worry about him, says Thomas OBrien, a longtime friend and the chief executive at Atlantic Bank of New York. Of course, the burden of being a survivor is hard, and then there is the business burden, all the things that, between the three of them, they could have done with their own expertise is all focused on him now.
Born in 1956, Mr. Dunne was raised on Long Island in Babylon, N.Y., the third of five children in a wealthy family. His father was vice chairman of Cluett, Peabody & Co. and president of its Arrow shirt-manufacturing subsidiary. The boy took up golf at 9, and at 13 he befriended Christopher Quackenbush.
The two golfed together also worked together in high school, painting houses, tending bar, and caddying. They both wanted to be lawyers, but after graduating from Notre Dame in 1978 and failing to get into his first choice of law schools, Mr. Dunne took the advice of a man he had been caddying for and headed for Wall Street. His first job was as a municipal bond salesman for L.F. Rothschild, an old midsize Wall Street firm, at a salary of $12,000, and he knew he had found a home. It was there that he first met the Sandler and ONeill (Thomas) of his future and current firm.
My love of Wall Street became a matter of the combination of relationships people having to make decisions on their feet, the excitement, the aura, he says. I loved working downtown. I loved putting on my suit as if I was putting on a Yankee uniform.
What L.F. Rothschild could do was sell municipal bonds. I was on fire. Everything was a learning experience. My yield curve was a pole.
After four years at Rothschild, he started moving around on Wall Street and elsewhere perhaps a little too much, a little too fast.
There was unquestionably a time in my life when all my talent was wasted on the streets of New York at 3 oclock in the morning, every night, he says. Thats certainly a low point.
He spent two years at Lehman Brothers as a government securities trader and then another two with the same title at Prudential Bache (now Prudential Financial Securities) before hitting a wall. After just two weeks at PaineWebber in 1986, he was fired.
He doesnt like to talk about this period, though he joked about it in his eulogy for Mr. Quackenbush, recalling his friends teasing him that he was running out of prospective employers.
Being dismissed by PaineWebber would prove to be pivotal. Mr. Dunne soon got hired as a bond salesman at Bear Stearns by Mr. ONeill, and his future was set.
Two years later Mr. Dunne and Mr. Quackenbush, a lawyer for Merrill Lynch, met with Mr. Sandler in Mr. Sandlers Manhattan apartment along with five other longtime Wall Streeters, including Mr. ONeill, to talk about starting a securities firm that would specialize in financial services.
There was some discussion over what the firm would be named. Mr. Dunne made clear that his would not be part of it and was skeptical of the firms chances, but he joined it at the start; Mr. Quackenbush couldnt join.
I didnt really think we would be successful, Mr. Dunne says. But I wanted to give myself a chance to go into business myself.
In August 1988 Sandler ONeill opened for business on Broadway, a few blocks north of Wall Street, before moving there next door to the New York Stock Exchange in December of that year.. Almost everyone the firm hired had a personal connection to it. In its second year, Mr. Quackenbush left Merrill Lynch to start an investment banking division at Sandler ONeill.
Mr. Dunne was getting settled. He married Susan Rinklin, also of Babylon, in 1990 and became a father in 1992, and in February 1993 Sandler ONeill moved into the World Trade Center.
Five days after Sandler ONeill moved into the trade center, the Twin Towers were bombed. But Mr. Dunne says that terror strike didnt give him second thoughts about the move. Sandler ONeill was by then right where it wanted to be as a successful full-service firm serving the banking community doing equity, fixed income, securities trading, underwriting and sales, and advising on mergers and acquisitions. In 1995 Mr. Dunne was named managing principal. He felt he was a perfect fit with Mr. Sandler.
Herman was the most brilliant man I ever met, Mr. Dunne says. He was extremely optimistic. I would deliver the hard news. You need a guy like that.
Their closeness was cemented as the banking industry consolidated and stocks soared. Their firm prospered and became an extended family. Mr. Dunne and Mr. Quackenbush were godfathers to each others sons, had adjacent summerhouses in Babylon, and often hit the links together, along with Mr. Sandler and other partners. Mr. Dunne regularly shot in the 70s and belonged to more than 20 clubs, including such premier venues as Shinnecock, Seminole, and Augusta, where he once won the club championship. The things they had away from Wall Street were becoming so good that Mr. Dunne started thinking of getting out.
To some extent he had lost focus not necessarily in a business sense, but in a life sense, says Stanley F. Druckenmiller, chairman and founder of the Duquesne Capital Management LLC, and a friend of Mr. Dunnes.
I was scrabbling all over what would be the right thing to do, Mr. Dunne explains. I wont say it got easy, but some of the snap, some of the real fire and challenge was out.
He thought of traveling, spending more time with his family, and honing his game. Indeed, on Sept. 11, he was on a course in Westchester trying to qualify for a tournament when he heard the news. He saw the towers collapse on television in the clubhouse and spent the next few hours on the phone. Still in his golf clothes, he arrived in New York late in the afternoon and met with employees at a small office Sandler ONeill Asset Management had in midtown.
He told them that they would rebuild the firm. The next day, he thought fleetingly about giving up. The next week, when the bond and stock markets reopened, Sandler ONeill was in business again, though rumors spread through the financial community that it was on the verge of collapse. Mr. Dunne, in the uncomfortable role as the firms public voice, angrily disputed the report.
Still, after that first week he told American Banker that rebuilding his company was the hardest thing I have done.
Some of the most difficult moments happened away from the temporary offices he set up, first at North Fork Bank on Fifth Avenue and then at Bank of America Securities on 57th Street. On Sept. 19 he attended the first memorial. The week after that he attended 21, including Mr. Quackenbushs.
Before Sept. 11, I lived a very simple life, he said at Mr. Quackenbushs memorial. Eighty percent of the time I knew exactly what to do. I was seldom right, but never in doubt. Twenty percent of the time I asked Quackie. I will miss him every day for the rest of my life, but he will always be with us.
He knew he was carrying too much on his shoulders, so in early October he formed an outside advisory committee of friends he made playing golf to play the role of having someone to talk to as he did with Mr. Quackenbush and Mr. Sandler. It was a blue-chip trio: Mr. Druckenmiller, Kenneth Langone, the chief executive of Invemed Associates LLC, and Andrew J. Armstrong, a managing member of Spire Capital Partners LP.
He had Fred Price, another of the founding partners, take on much of the responsibility of finding new headquarters space in midtown.
Mr. Dunne, meanwhile, pored over resumes and took phone calls from bankers, traders, and salesmen eager to join the rebuilding company. On Oct. 13 he announced the first new hires 13 in all and that the firm would start a new corporate home on the sixth floor of a building on 55th Street, where the closest thing to a view was the traffic on Third Avenue.
In a conversation at the site with American Banker a few weeks later, discussing his plans to expand the office, he said: Its going to be great. No columns. We have to be able to communicate through the room and cant have anything distracting the view.
Sandler ONeill was the co-manager of a trust-preferred deal for Second Bancorp Inc. in late September, valued at $32 million. It was the firms first deal since Sept. 11, and Mr. Dunne worked the phones diligently looking for more business. Bankers he knew who would have never spoken with him before the terror attacks heard him out, he says.
John Sexton, the president of New York University, who after Sept. 11 came to know Mr. Dunne well, says, I got to observe the extraordinary commitment he has to sustaining Sandler ONeill both as a business and a community. Jimmy, as formidable a person as he was, was forced to become an even more broad-ranging person.
It wasnt until Dec. 16 that he attended his firms final 9/11 memorial, for his assistant, Debbie Paris. He spent New Years alone in the Caribbean, while his family went skiing, and for two days he didnt speak to anyone.
Then he was back at the grind and playing catch-up. The three-day West Coast conference, traditionally held in November, didnt take place until the end of February.
Mr. Dunne is still working at getting Sandler ONeill back to its market-making strength of Sept. 10, when it was handling 325 stocks. It is now at 225. In trying to convince everyone that his firm still has its financial muscle despite its human loss, he has met skepticism from even his closest supporters. When he wanted to raise employee compensation, his outside advisers objected, saying they thought the firm couldnt afford the hit to capital.
His decision to make the payouts brought that issue to an end, but Sept. 11 is a different matter.
Jimmy is one of the most emotional people, Mr. Price says.
Since the attack, almost anything having to do with Mr. Quackenbush and his family touches him, so when Mr. Dunne was invited to take his late friends place at a weekend golf tournament in January, he readily accepted in an exception to his new rule against spending too much time golfing.
I played pretty decently on Saturday and not so well on Sunday, he says. My caddy said at the fourth hole, Jimmy, youre already back in New York, and she was absolutely right.
