Bloomberg News

Warren Hellman, Philanthropist Who Led Lehman, Dies at 77

December 20, 2011

(Updates with additional Lehman career history in fifth through eighth paragraphs.)

Dec. 19 (Bloomberg) -- F. Warren Hellman, a onetime president of Lehman Brothers Inc., a pioneer of the private- equity industry and a philanthropist who funded an annual music festival in San Francisco, has died. He was 77.

Hellman died yesterday from complications associated with leukemia, according to a statement from Hellman & Friedman LLC, the buyout firm he co-founded. His death came three days after a meadow in Golden Gate Park, the site of his Hardly Strictly Bluegrass Festival, was renamed Hellman Hollow.

Along with Tully Friedman, Hellman started doing private- equity deals in 1984 before the industry had a name. His wealth, the amount of which has remained undisclosed, helped finance San Francisco museums and ballet, a local health clinic and the Bay Area News Project, a nonprofit news organization.

“If this city had any patron, he was it,” said David Lee, executive director of the Chinese American Voters Education Committee and a commissioner of the San Francisco Recreation and Park Department. “He’s a grandfather figure of San Francisco and a man who cared deeply about the city and had a vision that included everybody, not just in the business community.”

Hellman joined Wall Street’s Lehman Brothers in 1959 after graduating from Harvard Business School. His uncle, Frederick L. Ehrman, was chairman of the board, and Hellman’s fast rise -- he made partner at 26 -- led to some grumbling that he was the beneficiary of nepotism, the New York Times reported at the time. He became the firm’s president in 1973, at 39.

‘Very Good Banker’

Pete Peterson, who led a restructuring of Lehman after becoming chairman and chief executive in 1973, said “my affinity for Warren Hellman, the firm’s young president,” was one reason he joined the firm after serving as President Richard Nixon’s secretary of commerce. In his 2009 memoir, Peterson praised Hellman as “a very good banker with strong values” whose tenure at Lehman may have been shortened by the firm’s notorious “dog-eat-dog” culture.

When he gave up the Lehman presidency in 1976, Hellman denied reports that he had lost an executive-suite power struggle. He said he and his wife wanted to move closer to their children, who lived in Vermont and New Hampshire, and would work out of Lehman’s Boston office.

In Boston, though, he left Lehman in 1977 to open a venture-capital firm, which became Matrix Partners and was an early investor in Apple Inc.

Buying Levi Straus

In 1985, a year after returning to San Francisco and starting his investing practice with Friedman, Hellman helped orchestrate a leveraged buyout of blue jeans maker Levi Strauss & Co., along with Strauss family member Robert Haas.

Hellman spent more than two decades financing the restructuring of companies including the Nasdaq Stock Market Inc., advertising agency Young & Rubicam, motor-racing sponsor Formula One Holdings, and Getty Images Inc., the largest provider of photographs to publications.

Hellman stepped down as chairman of Hellman & Friedman in 2009 as the firm was closing its latest fund, bringing total capital raised to more than $25 billion.

One of his biggest paydays came in 2007 when Google Inc. bought DoubleClick Inc. for $3.1 billion, three times the price his firm paid for the online ad company just two years earlier. In an interview shortly after the deal was announced, Hellman credited his partners with seeing the growth potential of the market and realizing that DoubleClick was undervalued.

‘Really Nailed It’

“The people here really nailed it,” Hellman said. “They saw that that part of the business was starting to make really huge jumps in revenue and cash flow.”

Hellman’s civic and philanthropic roles in the Bay Area will be the more lasting legacy, according to friends and business partners.

In 2002, he met Philip Halperin, a former private-equity investor, over breakfast. They talked about starting an organization that pulls together money and support for public schools from a variety of sources.

From that meeting came the San Francisco School Alliance. Over the past six years, it has helped raise $1.8 billion in bond and tax campaigns to rebuild schools and boost teacher salaries, Halperin said.

“Warren had the power to change the trajectory of a person’s life in one breakfast,” Halperin, 48, said. “It didn’t matter if that person was a corporate titan or a firefighter or someone like myself who cared about schools.”

Underground Parking

To keep the M.H. de Young Memorial Museum and the California Academy of Sciences in Golden Gate Park, he personally funded a $400,000 campaign for underground parking, said Don Solem, a long-time public relations specialist, who led the campaign.

“I’d never run into anyone who funded a campaign that had nothing to do with his own economic interests,” Solem, 69, said in an interview. “He’s much more of a charitable figure than a political figure.”

Hellman’s most well-known gift to San Francisco came in the form of music. In 2001, a month after the Sept. 11 terrorist attacks, he put on a one-day festival in Golden Gate Park, dedicated to his lifelong love of bluegrass music and artists like the Louvin Brothers and Bill Monroe.

Ten years later, Hardly Strictly Bluegrass is a three-day event on six stages every October. Hellman is still footing the entire bill, amounting to hundreds of thousands of dollars annually, so that the music is free for attendees. Performers include Emmylou Harris, Steve Earle, Gillian Welch, and Hellman himself, who played banjo as part of his band, The Wronglers.

‘Love of Bluegrass’

“I first met Warren through our mutual love of bluegrass music and came to realize over the years what a special person he was,” Harris said in a statement. “He gave so much of himself to so many and we are all the richer for it.”

Frederick Warren Hellman was born on July 25, 1934, in New York. His formative years were in San Francisco, where his family had gained prominence in banking in the 1800s. One of his childhood friends was Don Fisher, the founder of Gap Inc.

After graduating from the University of California at Berkeley, he joined the U.S. Army and was stationed in Germany. It was there he met his wife, Chris. They had three daughters and a son.

One of Hellman’s most recent endeavors was the Bay Area News Project, known as the Bay Citizen. It was introduced in 2009 in collaboration with the University of California, Berkeley’s journalism school and KQED Public Media, as a response to cutbacks in newspaper coverage of City Hall, the courts, law enforcement and the arts, Hellman said in an interview. It was at least partly up to philanthropists to keep the news industry afloat, he said.

Local Politics, Theater

“Local politics, which is important, doesn’t get a fraction of the coverage it did,” Hellman said. “We have a very active, very successful theater, dance and music scene but how many articles do you ever see?”

Hellman invested the first $5 million in the project, which has since raised capital from more than 60 individuals, families and institutions, according to the website. The newsroom produces a twice-weekly Bay Area section of the New York Times.

When asked in a 2007 interview to connect the dots among his work, philanthropy and hobbies, Hellman said he just did what he loved.

“My life has been very unplanned,” he said. “It’s all been sort of random.”

--With assistance from Laurence Arnold in Washington and Anne- Sylvaine Chassany in London. Editors: Charles W. Stevens, Steven Gittelson

To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus