Centerbridge

Overview:

When Jeffrey Aronson and Mark Gallogly founded Centerbridge in 2005, they hoped to grow the New York City-based, private investment firm to a point it was “big enough to matter,”  but not so large as to lose the firm’s nimbleness and collegial culture.

In short order, Centerbridge proved successful. As the firm built its funds, the partners began to source more of the firm’s deals in Europe. By 2011, the partners decided that opening a second office in London made sense. A Centerbridge office in London would put the firm closer to potential deals on the continent and allow Centerbridge’s professionals to be a part of European networks.

Even with the market advantages, the partners moved deliberately in creating the London office. Aronson and Gallogly wanted to insure that the firm maintained its culture, what partners referred to as “the secret sauce” of the company, in opening the second office. So the firm concentrated on staffing the new office with veterans of the firm and trusted other professionals. They also linked the new office to New York City through technology, allowing the company to continue to work through open, regular, “all-hands” meetings.

In the years since the London office opened, the new location had proven important in sourcing European deals. In addition, the culture of the firm, seemingly, remained as it was. But there were still concerns. Had the partners done enough to ensure the collegial culture worked across the ocean? Or were there other measures the firm could adopt to insure their collaborative culture?

On the other hand, given the London office’s success in linking Centerbridge to new and profitable deals, would it make sense to create additional offices? If so, where should these locations be located?  Or would operating offices across the globe be too big a challenge to the firm's management style and culture, possibly destroying the secret sauce that underlay the firm's approach to investing and operating?

Format:
Raw, online
Teaching Note:
No
Suggested Citation:

Jean Rosenthal and Olav Sorenson, “Centerbridge,”  Yale SOM Case 15-015, December 24, 2015

Keywords:
  • Hedge Fund
  • United States
  • United Kingdom
Perspectives:
  • Asset Management
  • Employee/HR
  • Investor/Finance
  • Leadership & Teamwork