Investment firm Angelo, Gordon lays framework for succession

September 23, 2016 10:34 AM EDT

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By Svea Herbst-Bayliss

BOSTON (Reuters) - Investor Michael Gordon has no plans to retire but when he does he wants to ensure that Angelo, Gordon, the $26 billion firm he co-founded with John Angelo 28 years ago, survives without him.

To lay the groundwork for an eventual succession, Gordon said the firm created a management committee to run the business and will let senior employee partners buy out the founders' controlling interests over the next five years.

"I have been working closely for the last several months with senior leaders of the firm to develop a strategy that will best position us to transition governance and ownership of the firm to our next generation of leadership," Gordon wrote in a letter dated Friday and seen by Reuters.

The moves will ensure "our business continues to thrive long after I retire – which I have no plans to do any time soon," Gordon wrote.

Gordon will retain a significant, non-controlling interest, he said in the letter.

Succession planning has become a critical issue in the $3 trillion hedge fund industry at a time many of the industry's biggest firms are still run by their founders who are edging closer to retirement age.

The changes at Angelo, Gordon come less than a year after John Angelo, its co-founder, died in January of cancer at 74.

The new management committee will meet weekly and include Gordon, who is the firm's chief executive officer and chief investment officer, Deputy Chief Investment Officer Josh Baumgarten, and Adam Schwartz, who heads the U.S. and European real estate business. Baumgarten joined from Blackstone Group earlier this year.

Angelo, Gordon keeps a relatively low profile but is well known for its credit, real estate and private equity businesses. It also has a deep bench of top executives, industry analysts said.

The firm was founded in 1988 and at one point invested money for New York City. It also invests for Republican presidential candidate Donald Trump, according to a disclosure the candidate made.

(Editing by Bernadette Baum)



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