People walk to Brookfield Place off Bay Street on the day of the annual general meeting for Brookfield Asset Management shareholders in Toronto, May 7, 2014.MARK BLINCH
Ron Bloom, fresh off a gig advising KPS Capital Partners LP and its aborted buyout of two troubled steel makers, is jumping to Brookfield Asset Management Inc., which is providing debtor-in-possession financing for one of those steel makers.
There must be some deja vu for Mr. Bloom, who joined Brookfield as vice-chairman and managing partner this week. He was the mastermind behind the 2006 investment by Brookfield's Tricap Management Ltd. in Stelco Inc., when that company, which became U.S. Steel Canada Inc., was taking its first tortuous path through the Companies' Creditors Arrangement Act. Brookfield is the DIP lender for U.S. Steel Canada in its current jaunt through CCAA protection.
His new job, he said in an e-mail, is "focused on helping to invest and manage the $20-billion (U.S.) within [Brookfield's] private equity group." His old job was vice-chairman of U.S. banking at Lazard Freres & Co.
"I left only because I wanted to take on a new challenge – to try my hand on the principal side," he wrote in the e-mail.
Mr. Bloom's journey to Brookfield has been a Forrest Gump-like trip through the restructuring of various troubled pieces of industrial North America. He was a special adviser to United Steelworkers union president Leo Gerard when he knocked on Brookfield's door (it was called Brascan back then) in 2004 and finally convinced both the company and reluctant leaders of the union's locals in Canada to do a deal.
Tricap made out like bandits, picking up $375-million (Canadian) for its 37 per cent share in Stelco when the steel maker finally emerged from CCAA protection and was picked off in 2007 by United States Steel Corp.
He left the union in the darkest days of the Great Recession to work in the White House for Barack Obama on the bailout of Chrysler LLC and General Motors Co. But the long absences from his family led him back to Pittsburgh and he spent some time decompressing before joining Lazard.
His appointment at Brookfield does not signal that it is once again interested in buying the troubled steel mills it sold in 2007, sources involved in the restructuring said.
He will have a nice chunk of change to invest – Brookfield raised a tidy $4-billion (U.S.) last month for its Brookfield Capital Partners IV fund.
While he will be involved in investing and managing money, anyone on the other side of the negotiating table will face a fierce adversary.
He summed up his deal-making strategy in a speech he gave to an insolvency and restructuring conference in 2006:
"We are big believers in dentist chair bargaining. For those of you not familiar with this approach, it is inspired by the story of the man who walks into his dentist's office, grabs the dentist by the balls and says, 'Now, let's not hurt each other.'"