Wertheim & Co. was a prominent American investment banking and financial services firm established in 1927. Founded by Maurice Wertheim and Joseph Klingenstein, the firm played a significant role in the development of merchant banking and investment management in the United States during the mid-20th century. Over the decades, Wertheim & Co. evolved from a small merchant banking operation into a key player on Wall Street, known for its innovative practices and ability to adapt to the changing financial landscape.
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Learn MoreWertheim & Co. was founded during an era when financial markets were rapidly growing in importance. Maurice Wertheim and Joseph Klingenstein, the firm's founders, had previously worked at Hallgarten & Company, another investment banking firm. Their experience there helped them build a foundation in merchant banking, a sector focused on providing capital to companies in exchange for ownership stakes or profit-sharing arrangements.
The firm's first office was located at 57 William Street in Manhattan's financial district, a hub for banking and investment activities. Wertheim and Klingenstein set out to create a firm that would focus on personalized service for wealthy clients, emphasizing merchant banking, real estate investments, and advisory services.
One of Wertheim & Co.'s first major accomplishments came in 1928 when the firm acquired a controlling interest in the Underwood Typewriter Company. This acquisition was a significant transaction in the office equipment industry. Wertheim & Co. later facilitated the merger of Underwood with the Elliot-Fisher Company, forming Underwood-Elliot-Fisher, a major player in the office-equipment sector. This move showcased the firm's ability to identify strategic opportunities and create value for its clients and investors.
Throughout the 1930s and 1940s, the firm continued to grow, focusing on investments in both companies and real estate. The firm's conservative approach to risk helped it navigate the challenges of the Great Depression and World War II, enabling it to emerge as a trusted name in the financial industry.
The deaths of co-founder Maurice Wertheim in 1950 and senior partner Edwin Hilson in 1952 marked a turning point for the firm. Joseph Klingenstein, the remaining co-founder, assumed leadership and embarked on a mission to modernize the firm's operations. Under his guidance, Wertheim & Co. became one of the first firms on Wall Street to establish a professional research department.
This department focused on in-depth securities analysis, which was a relatively new concept at the time. The research-driven approach helped the firm provide its clients with informed investment strategies, gaining a reputation for thoroughness and accuracy. By the mid-1950s, Wertheim & Co. had achieved major-bracket status in both equity and debt securities underwriting, solidifying its position as a leading investment bank.
The firm entered a new era in the 1970s under the leadership of Fred Klingenstein, Joseph’s son. Building on his father’s legacy, Fred steered Wertheim & Co. toward institutional clients, expanding its offerings to include comprehensive asset management services. By this time, the firm employed around 200 people and was generating annual revenues of approximately $40 million.
Wertheim & Co.'s expansion was driven by its commitment to adapting to changing market demands. Institutional investors, such as pension funds, insurance companies, and endowments, were becoming increasingly influential in the financial markets. Wertheim & Co. recognized this shift and positioned itself as a trusted advisor to these large-scale investors.
Partnership with Schroders In 1986, the Klingenstein family decided to sell a 50% stake in Wertheim & Co. to Schroders, a British merchant bank with a global presence. The partnership allowed Wertheim & Co. to leverage Schroders’ international network and resources, while Schroders benefited from Wertheim’s strong foothold in the U.S. market. Following this partnership, the firm was renamed Wertheim Schroder & Co.
Complete Acquisition by Schroders By 1994, Schroders acquired the remaining 50% interest in Wertheim & Co., resulting in the firm's rebranding to Schroder Wertheim. This acquisition marked the end of the Klingenstein family's involvement in the firm and signaled a new chapter in its history.
Final Chapter: Integration into Citigroup In 2000, Schroders sold its global investment banking operations, including Schroder Wertheim, to Salomon Smith Barney, a subsidiary of Citigroup. This transaction was part of a broader consolidation trend in the financial services industry during the late 1990s and early 2000s. As a result, Wertheim & Co.’s legacy became part of Citigroup’s expansive investment banking operations.
Maurice Wertheim Maurice Wertheim (1886–1950) was not only a visionary businessman but also a prominent philanthropist and advocate for the arts. He was deeply involved in promoting chess in the United States and was a patron of the Metropolitan Museum of Art and the New York Philharmonic.
Joseph KlingensteinJoseph Klingenstein (1885–1980) was the driving force behind Wertheim & Co.'s growth and modernization. Known for his sharp investment instincts and dedication to philanthropy, Klingenstein was a key benefactor of Mount Sinai Hospital in New York.
Fred KlingensteinFred Klingenstein continued his father’s legacy by leading the firm’s expansion in the 1970s. His leadership was instrumental in establishing Wertheim & Co. as a trusted advisor to institutional investors.
Although Wertheim & Co. no longer exists as an independent entity, its impact on the financial industry is still recognized. The firm was an innovator in securities research and asset management, and its legacy lives on through the organizations that absorbed its operations. Wertheim & Co.’s commitment to professionalism and innovation set a standard that influenced many other financial institutions.
