November 30, 2009 / 5:04 PM / 11 years ago

Fred Joseph, former Drexel chief, dies at 72

NEW YORK, Nov 30 (Reuters) - Fred Joseph, who ran U.S. junk bond powerhouse Drexel Burnham Lambert in the 1980s, helping create the modern global high-yield market, has died.

Joseph, 72, passed away at Presbyterian Weill Cornell Medical Center on Friday after battling multiple myeloma, John F. Sorte, chief executive of Morgan Joseph & Co, said in a statement.

Joseph, a co-founder and a managing director at New York-based Morgan Joseph, continued to counsel investment banking clients as recently as four weeks ago, Sorte said.

Joseph joined Drexel Burnham as co-manager of the firm’s corporate finance department in 1974 and was named chief executive officer in 1985. He worked with Michael Milken to usher in an active capital market for junk bonds, steering Drexel through its rise to power during the junk bond heyday in the 1980s.

Drexel filed for bankruptcy protection in 1990 after Milken was charged with multiple counts of securities fraud. Milken received a 10-year sentence after pleading guilty to securities-related felonies and served 22 months.

Joseph was one of a number of Drexel alumni who emerged as influential figures on Wall Street. Others included Ken Moelis, former president of investment banking at UBS; Leon Black, head of private equity firm Apollo Management; and Abby Joseph Cohen, senior investment strategist at Goldman Sachs.

Following the collapse of Drexel, Joseph was chairman of Clovebrook Capital, an investment banking boutique, from 1994 to 1998. For the next three years, he served as a senior adviser and managing director at ING Barings LLC.

“Fred unquestionably was one of the finest individuals I have known,” Sorte said in a statement. “He was a man of honor and great courage, and has always been an inspiration to all who knew him.”

Joseph was a graduate of Harvard College and received a masters in business administration from Harvard Business School. (Reporting by Dena Aubin; Editing by Leslie Adler) ((dena.aubin@thomsonreuters.com; +1-646-223-6325; Reuters Messaging: dena.aubin.reuters.com@reuters.net))

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