1953's Triple Alliance
ALUMNI ALBUM-17
Seven years ago three Dartmouth classmates who had just turned 30 - Richard D. Lombard, Paul D. Paganucci, and William N. Vitalis, all members of the Class of 1953 - opened their New York investment firm in one small room at 15 Broad Street. Although they had only one secretary for the three of them, they managed to make a very impressive start by purchasing a seat on the New York Stock Exchange for $200,000 (today it is worth about $450,000).
Heading into its eighth year, Lombard, Vitalis & Paganucci, Inc. today employs over fifty people. The firm's gross income has increased each year by an average of 50 percent and its capitalization now exceeds $1,400,000. Gross income for the first nine months of this year is up 110% over 1967. Company president Paul Paganucci predicts it will stay above the 100 percent level through the end of 1968.
The firm really had its genesis at Dartmouth where the trio first became friends and talked about the sort of careers they might follow after graduation. Paganucci and Vitalis were fellow members of Casque & Gauntlet their senior year, and the next year Paganucci and Lombard lived across the hall from each other at Chase House while attending Tuck School.
"Bill Vitalis and I talked a little bit our senior year about getting into business together somewhere down the road," Paganucci recalled, "but I went to Tuck and Bill to the Marines and it was several years later before we got together again in New York."
After service, Vitalis taught briefly at Deerfield Academy, then became associated with W. R. Grace & Co., and later with Morgan Stanley & Co., a leading New York investment firm. Lombard, after graduating from Tuck School in 1954, also did a hitch with the Marine Corps, then became associated with Stone & Webster Securities Corporation, a New York investment banking firm. Paganucci took a Harvard Law School degree after his 1954 graduation from Tuck, and then, like Vitalis, he joined W. R. Grace & Co. in 1958 and remained there as an assistant to J. Peter Grace, the president, until the new firm was founded.
The trio became close friends in New York City in the late 19505, with Vitalis and Paganucci sharing bachelor quarters until Bill got married. Lombard, in June 1954, had married Jane Kettering, sister of his fraternity brother, Chuck Kettering '53; while Bill Vitalis in 1957 had married into another Dartmouth family, his wife being the former Jean Buchanan, sister of Charles B. Buchanan, another '53 classmate, and daughter of William E. Buchanan '24, currently a Dartmouth Trustee. Paganucci clung to his bachelor status until 1966 when he met and married the former Marilyn McLean of Portland, Maine.
"One day," Lombard recalls, "Paul and Bill came to me with the idea that we get together and open our own investment firm. It was something I had always wanted to do, so we decided to go ahead."
Lombard, Vitalis & Paganucci, Inc., now located at Ill Broadway in the Wall Street area, is an investment banking and brokerage firm, specializing in institutional research and venture capital situations. The firm is registered with the Securities and Exchange Commission as an investment adviser and participates, as an underwriter, in public offerings of common stock and corporate and tax-exempt bonds. In the past year the firm has not accepted new individual accounts from the public and it has established a minimum of $250,000 for investment advisory accounts.
On the institutional side, LV&P provides research services to mutual funds, banks, insurance companies, and other institutional investors. At the same time the firm has increasingly become involved in investment banking, where the prime focus has been on raising venture capital for small, young companies with promising potential.
Three other Dartmouth alumni have joined the firm. Leo C. McKenna '56 (Tuck '57), a star Big Green quarterback and winner of the Barrett Cup, came in in 1967 and is now a stockholder and vice president for corporate services. "When I left Grace to start our firm," Pag said, "they asked me to suggest my replacement. I recommended Leo and they hired him, and Leo was there until we invited him over "to LV&P." Leo McKenna, still in the trim of his quarterbacking days, is a director of Wheeling Steel Corporation, Thermal Dynamics Corporation (of West Lebanon), the Cleveland Barons, and C. F. Kettering, Inc. During the past 18 months Leo and LV&P have been instrumental in effecting changes in control or management, or in raising capital, for the first three of the companies listed.
The other two Dartmouth alumni with LV&P are Simms C. Browning '62 (Tuck '63), who is a research associate with the Institutional Services group, and Arthur Williams Ill '63 (Tuck '64), who is a marketing associate with the Institutional Services group.
But the firm is not all Dartmouth, Bill Vitalis is quick to point out. Two other stockholders and directors of LV&P are graduates of Colgate and the University of Pennsylvania. Walter R. Nelson, a Colgate man and former partner of Eastman Dillon Union Securities & Co., heads up the Institutional Services group with particular emphasis on marketing and block trading. William N. Clarke, who operates on the floor of the New York Stock Exchange, is a graduate of the University of Pennsylvania and the Johns Hopkins School of Advanced International Studies.
Lombard, who directs the firm's research operations, is a natural "chairman" for the firm. He's articulate, enthusiastic and, in the jargon, "credible."
"When I was elected Chairman of the Dartmouth Alumni Fund for 1969, my associates felt that I should also be chairman of the firm," he told us with a wry smile. Lombard knows his business and keeps close tabs on what his researchers are doing. He's also active as president of the Charles F. Kettering Foundation and treasurer of Bennett College, and has been active in numerous community programs in his hometown of Rye, N. Y.
Paul Paganucci, as "managing partner" and president of the firm, quarterbacks the team, and according to several sources there's none better. A chunky, determined man, Pag battles the myriad problems of rapid growth. He is also chairman of the board of Computer Property Corporation, a director of the W. R. Grace & Co. Foundation and Mower Lumber Co., vice president of the Dartmouth College Club of New York, and a trustee of the Catholic Student Center at Dartmouth and Casque & Gauntlet. He has also been, since graduation, secretary for the Harvard Law School class of 1957.
Bill Vitalis, who played guard on the Big Green football teams under Tuss McLaughry, still moves and looks like an aggressive lineman. His drive and initiative played a key role in the formation of LV&P. Bill is in charge of the syndicate and underwriting operations for the firm. Vitalis is a trustee of Hebron Academy in Maine, a director of Computer Property Corporation, and a member of the Bond Club of New York.
How was the firm name selected?
"The three of us kicked this around for a long while," Dick Lombard told us. "We considered a number of alternatives, but finally got down to using our last names and then it boiled down to how they sounded and pronounced best."
The future of Lombard, Vitalis & Paganucci, Inc. looks promising to all three classmates. "We're conservatively optimistic," says Chairman Lombard, "but we do plan to remain a small to medium-sized firm and not just expand automatically." At the same time, he concedes that they are outgrowing their present office space at 111 Broadway and are wrestling with "real estate problems."
President Paul Paganucci is more precise. "We hope to continue to increase gross income by at least 50% each year," he says. He recognizes that the economy will have a great bearing on this goal.
The betting on Wall Street is that the energetic young firm of Lombard, Vitalis & Paganucci will continue to climb. And on the Dartmouth side, there is a certain special interest in their success, extending well beyond the Class of '53. Not many alumni ventures in the world of finance had such a student prelude in Hanover, and even fewer, if any, can match this example of a tripartite alliance within one class.
Paul Paganucci, Dick Lombard and Bill Vitalis, all '53, in their New York brokerage headquarters.
