Many people are not aware of the existence of this small yet powerful, family-owned bank that was founded over eighty years ago in New York. Allen & Co. is unique in the sense that it does not publicize itself; at the same time its main focus is on creating associations between investors, media executives, and other power brokers.
The broker manages funds for well-off individuals, including those of the Allen family. It also assists companies in locating business partners, buyers, and investors. Additionally, at times Allen & Co. invests in particular clients, similar to the way later-stage venture companies do.
The organization achieves quite favorable results despite the fact that it is pretty much a well-kept secret. There is no public web site or contact information that the press is privy to. Only on rare occasions are any public statements made regarding its actions.
Allen & Co. was established in the 1920s by two brothers, Charles and Herbert Allen. Herbert’s son, Herbert Jr., took over and after increasing the company’s client base, he later passed the operation along to his son, Herbert III, in 2002.
The organization now houses 175 employees in a simple building located in Manhattan. It operates similarly to an ordinary investment bank in some ways. It performs underwriting, merger, and acquisition functions. However, it does not hold a research department and has never been a member of the New York Stock Exchange.
In recent years, the organization was formulated into a new, limited-liability company, Allen & Co. LLC. With a net worth of approximately $1 billion the original company continues to act as an investment medium.
Despite its great success in managing funds and forging partnerships, the firm has been relatively inconsequential with regard to its statistical placement. According to the Securities Data rankings, Allen & Co. has not been ranked greater than 11th, at least between the years 1990 and 2004. However, its strategy of focusing on long-term, beneficial relationships has paid off.
With over 40 percent annual return to its shareholders between the mid-1980s and 2002, it obviously has done something right.
One notable achievement is the company’s participation in the Google IPO. Allen & Co. had the privilege of being listed in a small group of firms underwriting the IPO, right beneath the two large, well-known organizations of Morgan Stanley and CSFB.
Nancy Peretsman, the firm’s managing director, was responsible for building this client relationship and for assisting with the Google bid to make an investment in AOL.
In 2006, Peretsman held the honor of being voted as one of Fortune’s 50 most powerful women.
Other noteworthy employees besides Nancy Peretsman include Bill Bradley, ex-Senator/presidential candidate and Hall of Fame basketball player, and George Tenet, former Director of the CIA.
Most of the company’s success has been attributed to its strong establishment of long-term connections. Allen & Co. has carried out this strategy in a variety of ways. For example, when they discovered that there were many new web startups in the Silicon Valley that had experienced challenges in obtaining advertisers and content for their web sites, Allen stepped in to help.
The firm offered to bring existing connections together with these newer web entities. It extended invitations to many of the new entrepreneurs from Silicon Valley internet establishments to its yearly conference in Sun Valley, Idaho. The conference is host to many folks who are prominent in the media world. In this environment the new entrepreneurs have the opportunity to network with this elite group. Some regular attendees include Bill Gates, Michael Eisner, Warren Buffet, and Oprah Winfrey, to name a few.
“Deals just don’t get done in Hollywood unless Allen & Co. has a hand in it,” according to Excite, quoting a “media mogul.”
With regard to media banking, Allen & Company’s competition includes other upscale investment firms such as Montgomery & Company and Savvian. However, larger investment banks have also begun to realign their focus into more private deals.
Looking ahead, the company will probably remain low-key as far as the public is concerned. Furthermore, there is little doubt that the organization will continue its unique approach of formulating long-lasting, meaningful relationships as the main means of its success.
