Ken Moelis, who got his start at a Michael Milken-run firm and later clinched mega deals at his own $4.6 billion boutique bank, plans to step down as chief executive of Moelis & Co. this year, the firm said Monday.
Moelis, 66, will take on the role of executive chairman on Oct. 1, according to a press release. He will continue advising clients in this new position.
Navid Mahmoodzadegan, 56, co-founder and co-president of Moelis & Co, will replace the CEO and join the bank’s board of directors, while Jeff Raich, 58, the other co-founder and co-president, will become the executive vice chairman.
Shares in the boutique firm dropped 1.9% Monday morning.
Moelis told the Wall Street Journal he expects to pull off the “smoothest transition ever in the history of Wall Street” – even though the bank shares his name.
But the succession plans have been in the works for years, and Moelis has focused on training young bankers, maintaining Moelis & Co’s staffing and strengthening relationships with clients.
His heir apparent, meanwhile, has been with Moelis & Co since the very beginning.
“As Co-President, [Mahmoodzadegan] has been involved in every major decision we have made and has been a key driver of our Firm’s most impactful strategic growth initiatives. He’s a unique talent and one of the best strategic advisors I have ever worked with,” Moelis said in a statement.
Moelis started his career in 1981 at Milken’s Drexel Burnham Lambert, the junk-bond pioneer that later collapsed amid a securities fraud scandal.
There, he formed relationships with entrepreneurs like CNN founder Ted Turner and hotel billionaire Steve Wynn.
In 1990, when Drexel collapsed, Moelis moved to Donaldson Lufkin & Jenrette. He stayed there for a decade, eventually rising to head of corporate finance and advising big-name clients like a pre-presidential Donald Trump.
When Drexel was sold to Credit Suisse in 2000, Moelis left for UBS.
“It’s not easy to lose talent like Kenny. It’s not a positive thing for DLJ,” Trump said at the time.
Moelis started his own firm in 2007 with Mahmoodzadegan and Raich, after the three had become friends at DLJ.
Moelis & Co quickly scored a deal advising Hilton Hotels Corp. on its $26 billion sale to Blackstone Group, which was announced in July 2007. The private-equity firm has since sold its stake in the hotel chain.
As it confronted the financial crisis of 2008, Moelis & Co stunned Wall Street by setting off on a hiring spree – making the risky bet that companies would continue bringing big deals to boutique firms instead of larger banks.
The firm went public in 2014, though Moelis held onto a supervoting stock and special approval rights. A judge struck down some of those rights last year.
Shares in Moelis & Co reached an all-time high near $80 in February. But the stock is down about 20% so far this year as President Trump’s steep tariffs and sharp policy changes have muted dealmaking.
Moelis’ firm has continued to advise major clients over the past year, including Hailey Bieber’s skincare brand Rhode, which recently announced a $1 billion deal to be sold to elf Beauty, and David Ellison’s Skydance Media, which has been pursuing an $8 billion acquisition of Paramount.
Boutique firms like Moelis & Co raked in the second-highest share ever of merger-and-acquisition fees in the US last year, according to data from LSEG.
“I’m not sure I would have guessed 20 years ago that this segment would be this large,” Moelis told the Journal.
Both Moelis and Mahmoodzadegan said they are optimistic that this trend will continue.
“It’s funny, you advise clients all these years to do things at the right moment…and this is the right moment for the firm,” Moelis told the Journal on the timing of his departure.
Mahmoodzadegan and Raich were promoted to co-presidents in September 2015 with future succession plans in mind.
The soon-to-be chief executive has drawn in major deals in the bank’s media, sports and entertainment franchise, including a sale of the Phoenix Suns and Mercury to Mat Ishbia, the billionaire chairman of mortgage lender United Wholesale Mortgage.
