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Dodgers' Guggenheim subject of SEC probe over Michael Milken ties

February 27, 2013|By Steve Dilbeck
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Money, money, money. So much money. From places only the most sophisticated financial followers truly understand, not that they always agree.

Last year Guggenheim Partners formed a group to buy the Dodgers and spent a record $2.1 billion on the purchase. In a remarkably short time, it skyrocketed the team payroll to a baseball record $230 million. They’re dropping another $100 million or so on a quick little makeover of Dodger Stadium.

Yet exactly where all this money has come from remains something of a mystery, credit going to Guggenheim’s sudden explosion on the Wall Street scene and Chief Executive Mark Walter’s preference for privacy.

Still, when you purchase a high-profile entity like the Dodgers in the entertainment capital of the world, it grows increasingly difficult to remain behind the curtain. Now it has been cracked ever so slightly in a cover story in Fortune.

Fortune talked to both Walter and Guggenheim President Todd Boehly and the story offers several interesting morsels about the group and its purchase of the Dodgers:

--Guggenheim Partners manages $170 billion for institutions, insurance companies and individuals. It started in 1999 with $5 billion.

--Walter, Boehly and client Bobby Patton each contributed $100 million, Magic Johnson $50 million and Peter Guber $25 million toward the purchase of the Dodgers.

--Though considered the leading contender to purchase AEG, Guggenheim may back off of pursuing the company, its $10-billion price tag apparently too rich even for it.

--For the last two years the Securities and Exchange Commission has been investigating Guggenheim’s relationship with client Michael Milken, the former junk bond king who has been banned from the securities industry.

--Despite its remarkable financial ascent in the past 14 years, Walter said it is not his plan to purchase and flip companies.

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