Team

Two Brothers' Paths Diverge In Old, New Media

Larry Marcus, who left Wall Street for a venture-capital career in San Francisco, boasts that he hasn't had to wear a suit in six months. He doesn't have to. That's for "pencil pushers" who toil as analysts on the Street. Like his older brother.

Andrew Marcus, in fact, is the typical Wall Street stock-research analyst: button-down, performance-focused and living in Wall Street's favorite bedroom community, Greenwich, Conn. Drew, as he is better known, began covering broadcasting-company stocks in the early 1980s and is one of Wall Street's best-known media analysts. Yes, he wears a suit.

If this sounds like the grist for a modern Family Feud on the Street -- the New Economy younger brother vs. the Old Economy older brother -- well, it hasn't quite gotten to that point. But the two brothers' paths in the high-finance world do show the tugs of the New Economy vs. the Old these days, and how the two sides of the Street often intersect. The brothers, when they're not sneering good-naturedly at each others' jobs, keep finding themselves running into each other, and helping each other.

The brothers' competition is Wall Street's version, on a lower level, of the Williams sisters, who made history recently by playing against -- and with -- each other at Wimbledon. Their father didn't know whom to root for when they squared off.

The Marcuses' father, Peter Marcus, is an Old Economy stalwart; he has spent virtually every day of his working life as an analyst who has had his arms wrapped around the steel industry. It came as no surprise to him that Andrew would follow in his footsteps, but Larry was another story.

"I wouldn't have done it," said the father, of 35-year-old Larry's current New Economy adventure. "But he understood all the shades of gray, all the issues and he's a grown-up guy and this is his vision," he said.

The father might, in fact, have indirectly encouraged the younger brother's move. "Growing up, our father always said he didn't care what you did," recalls 38-year-old Andrew, "as long as you were the best at it."

Larry took that to heart. When not focusing on the latest venture-capital investment, he plays the drums in a rock band with venture investor Roger McNamee that has jammed with members of the Grateful Dead and has played for President Clinton.

There was a brief moment of family togetherness, before the brothers went their separate ways in business, when they worked together at Deutsche Bank AG's Deutsche Banc Alex. Brown securities firm (Andrew in the New York office and Larry in San Francisco). But just as a weekly media report involving both Larry and Andrew was launched, Larry did what a typical younger brother would do: He quit to work for the flashier world of venture capital. He is now a partner at WaldenVC, a venture-capital outfit in San Francisco that focuses on new-media companies.

"I'm really swinging for the fences in pursuing my dreams and being led more by my intuition and real desires than chasing near-term dollars," Larry said. His older brother still works at Alex. Brown, as co-group head of global-media research, but now based in the Greenwich office.

And just as New Economy and Old Economy corporations cross over, the brothers do. Over the past year and a half, Andrew and Larry have found themselves co-authoring research reports and holding conferences, to highlight new opportunities for old-media and new-media companies.

From the beginning, Andrew had his sights set on Wall Street, working at his father's office during vacations in college, and quickly moving to the Street after graduation. His prowess helped put Alex. Brown on the map for broadcasting and media coverage.

In contrast, Larry says: "I fought the pressure to become an analyst." He held a series of jobs, ranging from advertising to running a retail computer-lab in New York. But he was fascinated by new media and cutting-edge technology. He headed back to the West Coast and worked at new-media companies before returning to the University of California at Berkeley for graduate school; that is where he met Paul Stephens of Robertson Stephens, now a unit of FleetBoston Financial Corp., who was teaching an investment class. The meeting led to a job covering the interactive entertainment industry at the San Francisco investment bank.

Growing up in the New York City suburb of Armonk, the brothers say they didn't have much of a sibling rivalry. Although these days Drew contends he is the better athlete, while giving Larry credit as the family musician. Despite different approaches to research, they both wanted to make it on their own. Drew went straight to the old Kidder, Peabody & Co. after college, rather than PaineWebber Group Inc., where his father worked. Larry had an offer from Alex. Brown, where Drew then was, but instead went to Robertson Stephens to get his feet wet.

It seems venture capital is what Larry was cut out for. As an analyst, he was rarely in his office, constantly on the go, scouting out new companies and new technologies. "I find him to be very intuitive and very capable of defining relevant fields, observing trends, and projecting where the industry is likely to go in the future," said Henry Yuen, chief executive of Gemstar International Group Ltd., a producer of interactive-TV hardware and programming. Larry was among the first analysts to identify interactive television as a hot investing sector.

Andrew, meanwhile, is "well-informed on the nitty-gritty that's going on in the industry," said Mark Greenberg, portfolio manager of Invesco Leisure Fund, a media and entertainment fund. "That's set him apart from a lot of other guys who are out there," he added.

There is a common thread the brothers take to their research. "The Marcuses in general have the capacity to find that extra nugget behind a 'buy' and 'sell' " rating, said Steve Eskenazi, partner at WaldenVC and former director of new-media research at Deutsche Banc Alex. Brown.

The Marcuses have also been able to capitalize on their family ties. Recently, Larry contributed to his father's research report discussing how electronic commerce will affect the steel industry. And despite Larry's switch to venture capital, the brothers will continue to work together, but now in a client-to-client relationship, "Even in this job, Drew is still my brother, and we're still going to do a lot of work together." But if Larry ever takes a conventional Wall Street job again, he won't hear the end of it. Before he made the switch to venture capital, his father mocked his son's aversion for research by giving him an oversize pencil. The inscription: "Larry Pencil Pusher Marcus."

© The Wall Street Journal