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Lunch at the Tribeca Grill with: Ross Mandell

Published by The New York Sun on 2005-05-04

Ross Mandell, founder and CEO of Sky Capital Holdings, fervently believes in redemption, rehabilitation and renewal.

"I was one of the bad boys of Wall Street," he said over lunch. "I was an alcoholic. I lived hard and played hard. I used drugs. I treated my friends, business associates and clients quite badly."

He wasn't the only person to lead a hard-charging life in the financial-services industry in the 1980s and 1990s, of course; indiscriminate sex, alcohol, cocaine, were all staples of a new breed of supremely self-confident traders, overwhelmingly men whom Tom Wolfe later memorably called "masters of the universe" in his best-selling novel, "Bonfire of the Vanities." But Mr. Mandell invited a great deal of notoriety, even in an environment of excesses.

He was, in his own words, "out of control." In those years, the Long Island-born graduate of the University of Maryland worked at Oppenheimer & Co., Prudential-Bache Securities, D. Blech & Co., and Steve Andrew & Co. - the latter two have long been defunct - and had several runs-in with the National Association of Securities Dealers. He was suspended for six weeks in 1995, and wound up paying tens of thousands of dollars in arbitration settlements and awards.

"I never declared bankruptcy," Mr. Mandell told The New York Sun. "I was in debt for a million dollars. But I paid everyone back. I remedied every situation that I had foolishly created."

He also checked himself into the Silver Hill rehab center in New Canaan, Conn. After four weeks, he emerged a new man, Mr. Mandell said.

"I decided to fundamentally change my life at that point," he said.

The change has been dramatic. He married, fathered two children, and began devoting time to religious and community activities.

Mr. Mandell also re-launched his career in finance. He founded and was the majority owner of Roan Capital Partners, a New York-based brokerage and investment-banking firm. He sold Roan in 1997, and then joined The Thornwater Company as a senior vice president.

"I was baby-sitting my four-month-old daughter and watching a financial show on television one day in June 2000, when it occurred to me that there would soon be a bust," Mr. Mandell said. "Some of the most reputable Wall Street companies were taking worthless companies, going public with their stock, and driving up that stock. Multibillion-dollar caps were being created for companies that had no underlying value."

Mr. Mandell paused in his recounting, and then said: "I knew the bubble would burst. I knew there would be a cleansing. There were all these corporate scandals happening around that time. I felt that there was scope for a well-funded and clean platform that would take advantage of the situation."

He decided to start an investment bank and a brokerage firm. He raised $9 million. The money, Mr. Mandell decided, would be used to build an international merchant bank.

So he hopped over to London in 2001 to launch Sky Capital Holdings, an international full-service merchant bank and brokerage firm. In less than four years, it has established a strong presence on Wall Street, and offices in Red Bank, N.J., and Boca Raton, Florida. Sky has more than 150 employees; it makes markets in about 600 individual stocks. It offers debt and equity private placements, mergers and acquisitions advice, and public offerings to its client companies.

Sky is also listed on the London Stock Exchange. In fact, the day that his company started trading on the LSE - June 2002 - the venerable firm of Robertson Stephens closed shop, a victim of the acquisitions trend in which big conglomerates have gobbled up small investment banks in Europe as well as America. Sky's stock was up 21% at the end of the first day of trading. (It currently trades around $3.) Indeed, soon after its debut on the LSE, Sky bought Everett Financial Limited, a London-based, LSE-listed private client brokerage firm, for the equivalent of $2.25 million in cash and stock.

"I'm back," Mr. Mandell said. "I'm back stronger than ever before. I've re-established trust with clients. I'm back on Wall Street with a clear, unclouded vision."

That vision includes providing financial advice and working capital for companies with market capitalizations between $10 million and $100 million. One company he's particularly proud of is GlobalSecure Holdings, which he chairs, and which he describes as a "one-stop mall for corporations, cities and agencies that have protection needs."

Mindful that after Sept. 11, 2001, the American government would be spending more than $130 billion on homeland security over a five-year period, Mr. Mandell's company has acquired producers of gas masks and powered respirators, and fire-safety equipment. GlobalSecure has also won a contract from a federal government agency to conduct training programs.

"I'm very opportunistic," Mr. Mandell said. "Business is a continuous challenge - you're only as good as your next trade or acquisition, not your last one. At the same time, I'm very pragmatic. I'm always on the lookout for products that have huge sales potential."

That's why he's taken a majority stake in Advanced Spinal Technologies, a Britain-based manufacturer of a device that treats people with persistent back problems by manipulating the joints of the spine. Mr. Mandell - who's long suffered back problems - said that the device has given him great relief. So enthralled was he with the device - called the Pamm3 MicroManipulator - that he took a personal stake of 12.5% in the company. He expects that the company will eventually set up a chain of back-care clinics in America and other parts of the world.

Wall Street and the financial-services world, however, can have long memories and hold grudges. Aren't there some people who refuse to believe a leopard can change his spots?

"I've worked at rebuilding my life and my business," Mr. Mandell said. "I have a record to prove that. My old pals from the 1980s wouldn't recognize me now."

Pranay Gupte,
Senior Writer and Global-Affairs Columnist


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