Wall St. Veteran Named CEO of Houlihan Lokey

Los Angeles-based investment bank Houlihan Lokey Howard & Zukin capped a year of record growth Monday by naming Wall Street veteran Franklin W. “Fritz” Hobbs to take over as chief executive Jan. 1.

Hobbs, former chairman of Warburg Dillon Read Inc., succeeds firm co-founder O. Kit Lokey, who will continue as chairman.

Houlihan Lokey, a boutique investment banker to mid-size companies, specializes in corporate restructurings and debt workouts. Business has been brisk as the economy has deteriorated, with the firm advising $4 billion worth of deals this year, according to Bloomberg News data.

“It was a record year in terms of the number of deals, revenues posted and profits,” said Lokey, 59.

Houlihan Lokey’s double-digit growth convinced Lokey and other shareholders of the employee-owned firm that it was time to bring in another executive to run day-to-day operations, Lokey said.

“It’s getting too complicated for us now to run a business and think about the future, so Fritz will run the company and I’ll think about the future,” Lokey said.

Hobbs, 54, said he has fielded numerous Wall Street and government job offers since resigning as Warburg Dillon Read’s chairman in March 2000, but the Houlihan Lokey post was unique in offering the opportunity to lead an investment bank that was profitable, successful and expanding in its niche.

Hobbs said his goals were to increase the firm’s mergers and acquisitions activity while making the small firm better known.

“It’s not as if they aren’t doing a heck of a job already, but my [goal] will be to broaden that reputation around the country,” Hobbs said.

Hobbs had spent his entire career at what is now UBS Warburg, a subsidiary of Swiss Banking company UBS. Hobbs started at the company, then known as Dillon, Read & Co., in 1972.

In 1985, Hobbs and bankers from Goldman Sachs Group Inc. helped Unocal Corp. fend off a hostile takeover by T. Boone Pickens.

Dillon Read was acquired in 1997 by Swiss Bank Corp., which in turned merged with UBS. Lokey and Hobbs said Houlihan Lokey was not interested in following Dillon Read’s path of selling itself to a larger company.

Hobbs said he was most comfortable working with a smaller firm. Houlihan Lokey has 500 employees and 10 offices nationwide.

“We had 1,000 people at Dillon Read, and that’s the size company I’m used to,” Hobbs said. “I had zero interest in selling Dillon Read [in 1997], but my partners wanted to, and you listen to your partners.”