Baseball, business and bones are signs of Guggenheim's growth

Mark Walter, CEO of asset manager Guggenheim Partners LLC, eschewed the usual pricey corporate art when his firm remodeled a couple of years ago. Instead, he bought dinosaur fossils, including a 4-foot-high Tyrannosaurus rex head for about $70,000 that sits near his office on the 49th floor of a Chicago skyscraper.

Buying big at the right price is a metaphor for the expansion Mr. Walter is pursuing at Guggenheim, more than doubling assets under management since the end of 2010 while Chicago rivals have grown about 20%. Guggenheim, formed in 2000, leapfrogged older firms to become Chicago's third-largest money manager, with $160 billion, behind Northern Trust Corp. and Nuveen Investments. The growth, including an investment this year in the Los Angeles Dodgers, is drawing attention to the formerly low-profile firm.

“We were kind of growing along pretty quietly without many of what I'll call splash-type events,” Mr. Walter said. In the past several years, “the markets were in such turmoil, there were more opportunities.”

Three hundred of the private company's 2,200 employees are located at its downtown Chicago headquarters, where it plans to take more space. The global firm also is expanding a second headquarters in New York, where there are 650 employees.

“They've had a good combination of smart acquisitions and bringing in the right people and growing it organically,” says Brien O'Brien, CEO of Piper Jaffray Co.'s Chicago-based Advisory Research Inc. unit, which has done business with Guggenheim.

Unlike many financial firms, Guggenheim wasn't crippled by the financial crisis. That allowed it to acquire foundering companies, such as Carmel, Ind.-based Standard Life Insurance Co., and provide a base for refugees from larger Wall Street rivals, such as former Bear Stearns Cos. CEO Alan Schwartz, who established Guggenheim's broker-dealer and merger and acquisition advisory businesses.

“We did avoid, by and large, and our clients avoided, by and large, all the real negative investment categories during the collapse, which left us in a strong enough position to then be able to say yes to transactions,” Mr. Walter said.

Locally in Chicago, he and his wife, Kimbra, are major benefactors of the Lincoln Park Zoo, and the firm sponsored the Great Catsby ball, the zoo's biggest fundraiser this year. The Walters also are expanding their footprint in the Chicago neighborhood of Lincoln Park, planning a house on an oversized lot down the street from their current address.

Mr. Walter moved to Chicago to attend Northwestern University Law School, where he graduated in 1985. He founded Chicago investment firm Liberty Hampshire Co. in 1996 and later teamed up with Peter Lawson-Johnston II, an heir to the Guggenheim family fortune, to create Guggenheim Partners, which would invest the scion's family money.

During the past 12 years, Mr. Walter brought together a range of businesses under one Guggenheim brand: asset management for institutional, high-net-worth and retail investors; insurance companies; global securities trading; aircraft leasing; and other businesses such as model-train maker Lionel LLC. The firm's private equity arm bought everything from a controlling stake in the Dodgers to the Hollywood Reporter.

“We think the Dodgers is one of the greatest brands in America and one of the finest franchises,” he says.

Guggenheim also bid for units of Germany's Deutsche Bank AG this year, but stopped short of a deal.

“The price was maybe getting too big for Guggenheim,” said Independent Research analyst Stefan Bongardt, who is based in Frankfurt.

Other expansion efforts are still on. It's reportedly a bidder for Santa Monica, Calif.-based Dick Clark Productions Inc., in competition with Guggenheim co-founder Todd Morley, who left the firm in 2009 to start G2 Investment Group.

The quick expansion has made it difficult for Mr. Walter, who routinely travels among Chicago, New York and Los Angeles, to unify the firm's disparate parts with one strategic vision, say some former executives who decline to be identified. The company said in a statement that it has a unified strategic vision.

Several top executives, including Chief Operating Officer Richard Goldman and Marketing Chief Marc Zeitoun, left this year and others have departed in the past few years, including many who had been at Claymore.

Claymore's former head of human resources, Lori Roberts, is suing Guggenheim in Cook County Circuit Court, alleging that Guggenheim low-balled Claymore's value to avoid paying her equity awards. The judge in the case said at a July hearing that he expects the case will go to trial.

Ms. Roberts declines to comment. Guggenheim attorney Peter Silverman, of Chicago-based Figliulo & Silverman, disputed the claims in court.

Lynne Marek is a writer for Crain's Chicago Business, a sister publication of Pensions & Investments.