Guggenheim Scandal Reverberates into the Palisades

By JOHN HARLOW Editor-in-Chief

As a tabloid scandal, the rapidly evolving Guggenheim Affair has it all: a Los Angeles Dodgers boss, tumult at the highest level of Manhattan financial circles and an icy, Hitchcockian blonde.

And, maybe the spark that ignited the blaze, a $13 million home in Pacific Palisades built by a Hollywood actress known for playing femme fatales.

The scandal, as reported from the Financial Times to the New York Post, has been broiling for months. But only now has Guggenheim Partners, a $300 billion hedge fund related to the venerable Guggenheim family, been prompted to deny reports that Chief Executive Mark Walter is stepping down. Or that he is in any way involved with a relatively junior executive.

The once low-profile Midwesterner came to Los Angeles in 2011 as he put together the deal with luminaries such as Ervin “Magic” Johnson to buy the Dodgers out of bankruptcy for $2.15 billion. They also snapped up the Los Angeles Sparks in 2014. Forbes has estimated Walter’s personal wealth at $2.5
billion.

But since then, according to the Wall Street Journal, the hedge fund Walter and three colleagues created 17 years ago has been stressed by a power struggle between Walter and Chief Investment Officer Scott Minerd.

It is said to be both personal and philosophical, amid reports of an SEC investigation, bad investments and rumors that Guggenheim is about to be sold to a rival.

No issue is too slight to be used as ammunition at board level, said the business press, including the mysterious role of Alexandra Court, a 30-something Guggenheim executive inevitably described as blonde. The color of the men’s hair has not been reported.

News reports have questioned Walter’s relationship with the South African-born banker, whose most famous achievement until recently was firing 22 people in one day “without blinking.”

She has been frequently listed in Dow Jones as one of the 100 most powerful women in European finance since her meteoric rise began four years ago.

It has been reported that Walter either funded or authorized the cash-only purchase of a gated estate on Maroney Lane built in 1938 by the actress (and blonde) Virginia Bruce who was famed for playing marriage-wrecking women in movies such as “The Great Ziegfield.”

The house was called Wildrose.

According to The Agency, which was offering Wildrose for $14.5 million last summer, the 8,100-square-foot manse, which includes a “British” pub with a secret staircase winding up to one of eight bedrooms, stands on a 67,000-square-foot “flag” lot.

Inquiries by the Palisadian-Post confirmed that the purchase was signed by Federico Hermida of Guggenheim Partners Latin America. And, according to Los Lomas neighbors, the mansion has been recently occupied by just three people—a woman fitting the description of Court and two children. But Walter has been a frequent visitor.

On Monday, Sept. 25, a Guggenheim spokesman told Reuters that Court is “in the process of negotiating a possible exit” from the company—repeating that she only enjoyed a “business relationship” with the married chief executive.

Court’s fate, like the future of the Hollywood mansion that Guggenheim paid for, appears to be up to the board of a hedge fund with a once-impeccable name.