Project Atlas
With regard to an initiative coined “Project Atlas”, Morgan Stanley’s invidious scheme has had a “good news – bad news” effect. The good news is that their initial unjust actions became the impetus for its development – the bad news is that their malicious efforts never ebbed, and have arrested its launching.
Notwithstanding, Spencer C. Young remains optimistic that Project Atlas can and will be fully actualized – However, in the context of the extent and duration of Morgan Stanley’s blaspheming slander campaign against Mr. Young, this will not be plausible until the CMBS industry at large is convincingly informed of Morgan Stanley’s contemptuous fraud (along with the public revelation and vilification of Warren Friend and John Westerfield [and perhaps others] for their supporting roles). Realistically, this is the only viable option toward reinstating Mr. Young’s once strong professional reputation and reclaiming that which was stolen from him
“A pessimist sees the difficulty in every opportunity
. . . But an optimist sees opportunity in every difficulty“
– Sir Winston Churchill
What is Project Atlas?
Project Atlas is a rather novel fully-integrated real estate capital markets business model carefully developed by a core group of seven "Principals" (myself included) that would:
- "Hit the Ground Running" by starting operations immediately and generating profits in its first year of operation;
- Be Nimble in its ability to adapt quickly to market vicissitudes and reduced arbitrage from the eventuality of a maturing, or otherwise overcrowded market; and
- Establish Competitive Advantages that existing CMBS industry market leaders would find problematic, if not impossible to replicate
Project Atlas was to be rolled out in two “Phases”.
Phase 1 encompasses six core business segments noted below, along with the Principals responsible for each of those segments, and their relevant current and former company affiliations. The Principals of Phase 1 delineated below had extensively collaborated with Spencer C. Young to derive sound "bottoms-up" business plans, underwriting manuals, capital markets pricing and credit models, etc. – all of which were suffused in our consolidated operating plan, after incorporating comments elicited at secretly arranged group meetings at the Cornell Club of New York, where Mr. Young is a member.
Phase 1 – The Core Business Segments
The six core business segments involved teams aggregating 85 professionals, and headed up by the senior executives noted below, each of whom has a strong resume of accomplishment in commercial real estate and related finance and capital markets. Each of the below Principals (listed in alphabetical order) developed a detailed budget and implementation plan (included in the attached Exhibits, and specifically referenced by footnote), and each were prepared to leave their senior positions at some of the most prestigious financial institutions in the world to be part of Project Atlas.
- Conduit Loan Originations: Steve Beyer – JPMorgan / Morgan Stanley / Aegon
- Deal Management: Jackie Brady – JPMorgan / Nomura / GMAC
- Trading: Rob Cestari – Nomura / Apollo
- Investments & Credit Risk Management: Bob Clark – Aegon
- Small Loan Originations: Steve Cole – Union Central Life / Nationwide
- Large Loan Originations: Nicki Livanos – AXA / Equitable Insurance
While the Phase 1 Principals were aware there was a Phase 2, I had protected the names and contemplated roles. And although I have had discussions with many of these Principals, (in some instances I had received detailed business plans), I had deferred earnest discussions and detailed plan formulation until Phase 1 was successfully launched and operational – I have also only vaguely outlined their roles below, for similar proprietary reasons.
Phase 2 -- Supplemental Business Segments
These supplemental business segments of Project Atlas would employ another 125 people at full throttle, as contemplated, and be headed up by the following executives (again, listed in alphabetical order):
- Distributions, Coverage & Syndications: Sam Davis – John Hancock
- Small Loan Originations & Distribution: Joe Francis – Standard Insurance
- International Business Operations: John Ho – Merrill Lynch / JPMorgan
- Bank Liaison, Coverage & Syndications: Steve Jones – Wachovia Capital Markets
- Mezzanine Lending & Syndications: Richard Katzenstein – MONY Mutual
- Legal Counsel / CDO Structuring: Eric Klingenberg – Thacher, Proffitt & Wood
- Coverage & Transaction Generalist: Joe Mosley – Greystone / GMAC / Goldman
- Investment Hedge Fund: John Nunley – Allmerica Insurance
- Large Loans & Syndications: Steve Palmer – Cigna / Travelers / JPMorgan
- Chief Investment Officer: David Graves – State Farm
- Loan Syndications & Investment Joint Ventures: Blake West – Nationwide
Important Notes:
- Any person conversant in the industries of Commercial Real Estate, Insurance and Related Finance and Capital Markets knows of the exceptionally high caliber of people in the above listed groups.
- Every Principal listed above for Phases 1 and 2 either: (i) previously worked with or for Mr. Young, or; (ii) was a client of Mr. Young's over the roughly 10 years he was within “The House of Morgan” (i.e., JPMorgan and Morgan Stanley).
Senior Advisors
In addition, the formulation of Project Atlas assimilated the sagacious advisory insights of three friends, who also happen to be highly accomplished senior Wall Street executives – in alphabetical order, they are as follows:
- Michael Hanna – Mike was formerly Group Head of Municipal Bonds & Trading at Smith Barney and formerly Group Head of Derivatives at Donaldson, Lufkin & Jenrette. Having amassed a small fortune from his successes on Wall Street, Mike retired before the age of 40. Mike kindly advised on setting up the Project Atlas trading desk and related operations, as well as how to address Morgan Stanley’s tortious interference.
- Howard Keenan – Howard is the Founder and Managing Partner of Yorktown Energy Partners, one of the most successful energy private equity investment funds in the world – Howard graduated from Harvard, and seems to possess the “Midas touch” with all of his Funds’ investments. Howard advised on money raising and investment strategy for Project Atlas.
- Charles Trunz – Charlie is the former President of J. P. Morgan Securities, with whom I had launched the CMBS business at J.P. Morgan, and is currently the Chief Operating Officer of The North Shore-Long Island Jewish (LIJ) Health System. Charlie had advised on strategies associated with seeking Bank sponsorship, serving as an effective and invaluable advocate, as well as provided the nuts and bolts guidance in setting up the investment banking side of the Project Atlas operation.
As a result of significant market buzz about the launching of Project Atlas, on January 23, 2004, a cover page story on this exciting initiative appeared in Commercial Mortgage Alert, titled “CMBS Pro Planning Securitization Venture".70
After the story ran, Paul Fiorilla, The Managing Editor of this trade publication called me to say people at Morgan Stanley (most notably John Westerfield) had called him to say the article was “premature” because the initiative “would never happen” and he then proceeded to besmirch my professional abilities, and personal character, by referring to my past achievements as “hyperbole”.
