Predators' Ball

What Is the Predators' Ball?

The Predators' Ball was an annual convention held by investment bank Drexel Burnham Lambert Inc. for the purpose of matching high-risk companies searching for financing with investors who wanted the high rewards that can come with higher risk.

The Drexel conference, held at the Beverly Hilton Hotel in Los Angeles, became known as the Predators' Ball because it featured as speakers some of the nation's most prominent corporate raiders and financiers who were also Drexel clients. After the first convention in 1979, these conventions became increasingly focused on setting up leveraged buyouts and hostile takeovers using junk bonds.

Understanding the Predators' Ball

Participants at the Predator's Ball included private equity investors and corporate raiders such as Ron Perelman and Carl Icahn. The ball also attracted institutional investors in high-yield bonds and management teams from companies that either had been or would be the targets of leveraged buyouts.

The term "predators' ball" became the title of a book about the rise of junk bond trading and the fall of Drexel and Michael Milken. Milken is a philanthropist and former felon who, as an executive at Drexel during the 1980s, used high-yield junk bonds for corporate financing and mergers and acquisitions. Since then, predators' ball has been used to refer to meetings between high-net-worth investors who make their money through shorting, buyouts, and other aggressive tactics.

Connie Bruck's Predators' Ball Book

In 1988, Wall Street Journal journalist Connie Bruck wrote the book "The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of the Junk Bond Raiders" that describes the rise of Milken, Drexel, and the leveraged buyout boom they helped to fuel in the 1980s. Milken was not happy about the book and Time magazine reported that he offered to pay Bruck for all potential sales of the book in return for her ceasing from writing the book. She refused his offer.

Because the book was published at the height of the leveraged buyout boom, Bruck later updated it to address the impending collapse of Drexel and Milken's conviction on various securities and reporting violations.

The same year the book was published, the Securities and Exchange Commission charged Milken and Drexel Burnham Lambert with insider trading and stock fraud in 1988. A year later, Milken was indicted by a federal grand jury and eventually spent nearly two years in prison after pleading guilty to charges of securities fraud.