February 27, 2002: Features

Rare female Wall Street executive Alexandra Lebenthal ’86 continues the family brokerage’s grassroots approach

By Katherine Hobson ’94

Photo by Naomi Harris

Alexandra Lebenthal ’86 has a tangible reminder of how far women have progressed in penetrating the still male-dominated culture of the financial world: the framed cover of a January 1929 issue of The Smart Set magazine. Her late grandmother Sayra Fischer Lebenthal is the cover subject. And the headline? “Best looking broker.” This was the accolade chosen as highest possible praise for the 27-year-old cofounder of financial services firm Lebenthal & Co.

More than seven decades later, Alexandra Lebenthal leads the firm founded by her grandparents, which means sitting at her grandmother’s old desk in a large corner office overlooking the financial district of lower Manhattan — a more somber view these days — and a lot of responsibility. She is president and chief executive, following her father, James Lebenthal ’49, who now serves as chairman, emeritus.

Magazine cover lines are — mostly — more progressive these days, but Wall Street has not made similar strides. Lebenthal is one of only a few women in highly visible upper-management jobs at financial firms. (A 2000 study by nonprofit group Catalyst found that 11.3 percent of corporate officers in the securities industry are women, compared to 12.5 percent for all industries.) And harassment and more subtle discrimination still exist, even in higher management.

In the 1920s, her grandmother was a pioneer, says Lebenthal. “When I graduated I didn’t expect to continue to be a pioneer. When my daughter graduates, will she want to be one, too?”

Probably, if her daughter, now age five, falls in love with finance the way Lebenthal did. With Lebenthal’s lineage, her career trajectory would seem to have been inevitable. But, she says, despite the legacy, there was no pressure to pick the career she did. “My father told us to find whatever it was that we were passionate about,” she says. “It wasn’t like we’d come into the office and he’d say, ‘One day, this will all be yours.’ ” Her choice of college, however, was inevitable. In addition to her father, her uncle Joseph Mack ’50 (and later, her younger brother James ’90) attended Princeton, and she remembers going to an awful lot of reunions. “I remember having this sense of desperation when I was applying,” she says. “It seemed like the only school I wanted to go to.”

She got in, and until her sophomore year wanted to be an actress. But she worked at the family firm during her summer vacations, and by the middle of her college career was gravitating toward Wall Street. Her interest was perhaps as much a product of the age as genetics: This was the mid-1980s, when investment bankers and bond traders had the larger-than-life personalities and even bigger wealth that wouldn’t be surpassed until the arrival of the Internet economy.

Lebenthal was no quantitative junkie. Her performance in Economics 101 was not the high point of her academic career, she recalls, and she took accounting pass/fail. But she was intrigued by business as viewed from a historical, sociological, and anthropological perspective, and majored in history. She still keeps handy a copy of one of her junior papers, which was about the Securities and Exchange Commission — she has even given former SEC Chairman Arthur Levitt a peek.

Despite the summer jobs, Lebenthal didn’t join the family firm after graduation. Instead she went to Kidder Peabody, determined to get both “more life experience and more business experience.” She arrived on Wall Street just in time to witness the insider trading and junk bond scandals. The municipal bond industry was also seeing change. Munis, as they’re called, are another way (in addition to taxes) for government entities — including states, towns, and agencies — to raise money for either general needs or specific projects like a stadium. They can’t be issued willy-nilly, but must first be approved by voters or some other electoral body.

From a very early age, Lebenthal remembers her father teaching her about the value of munis. Munis were particularly attractive to investors because interest paid on them was exempt from both federal and, within the state that issued them, state and local income tax. And Lebenthal & Co. played a big role in popularizing their benefits for small investors. Jim Lebenthal is not only well known in the financial world, but his name and voice are also recognized by anyone who listened to the radio, watched television, or read the newspaper in the 1970s. One Lebenthal spot compared munis to a cash cow that would add MOO-lah to a portfolio; another called them “the workhorse of investments.” And during New York City’s debt crisis in 1976, a controversial Lebenthal ad stood up for the city’s creditworthiness, saying that “New York’s Streets Should Be As Safe As Its Bonds.” (Alexandra Lebenthal has followed in her father’s steps here, too; her voice and face can often be heard and seen on New York radio and television.)

The advertising worked; munis became popular for the little guys as well as the big. But then came the Tax Reform Act of 1986, which created two classifications of munis, depending on how much they benefited private parties. Public-purpose bonds remained tax-free; private-purpose bonds were taxable. Those bonds were suddenly on the same investment playing field as stocks, and because this was a bull market, the bonds could barely compete.

That was the year that Lebenthal entered the bond business. “I always knew the industry as it was struggling,” she says. Almost immediately the business unit where she worked began to shrink. “I knew I could come in any day and my job would be gone,” she says. Amid that instability, she was recruited to join her own family’s firm — not by her father, but by a former boss at Kidder Peabody. At 26, she worked with her grandmother, then 91, for a year, getting ready to take on her accounts, and moved up in the firm, working in a variety of sales and product positions. In 1995 she assumed her current role.

The 1990s were marked by consolidation among financial institutions, and Lebenthal & Co. took part last year. The family sold the firm to Mony Group Inc., an insurer, and it became a part of Mony’s Advest brokerage group. “We had the products, but not enough of the infrastructure,” she says. Lebenthal is now on the Advest board and senior management team.

She’s now aware that she’s a rarity, but it took her a while to realize that women faced professional obstacles. At her all-girls high school, she got an early version of girl power and never thought about limitations. At Princeton, she says she wasn’t particularly critical of the fact that three eating clubs — Tiger Inn, Cottage, and Ivy — were all male. (She joined Cap & Gown, which by then admitted women.) “The Sally Frank suit was going on,” she says. “I remember thinking, ‘Of course those clubs should be all-male.’ Today I would freak out about it.”

Lebenthal also recognizes, though, that the problem requires not only a removal of roadblocks, but also a way of thinking about how to balance family and career. “I see a lot of Princeton women with every intention of having a full career,” she says. After reaching the middle or senior executive level, though, many leave. “They feel like they don’t need to do it anymore, and it’s not worth the effort. And it’s very difficult to have small kids and not be on a mommy track.” (Lebenthal married a Princeton classmate, Jay Diamond, in 1991; they have two children.)

For her part, Lebenthal works hard to maintain a passion for both family and work. Memories of the World Trade Center are tied up in both. She remembers going to see the construction site with her father, sister, and brother when it was being built. And looking forward, she believes that the municipal bonds that are her family firm’s lifeblood will be crucial to the rebuilding and redevelopment of lower Manhattan. “They build everything people need to get up in the morning, turn on the light, brush their teeth, and drive to work.” Sounds like the beginning of a new Lebenthal ad campaign.

Katherine Hobson ’94 covers business for U.S. News and World Report.