Ziggy Gold Dust: David Pullman Made a Fortune on Bowie Bonds; Roll Over Marvin Gaye!

David Pullman is going through his press clips. He is

multi-tasking at the close of another busy day in his capacious Fifth Avenue

office overlooking Central Park. He has an entertainment lawyer in Los Angeles

on the speaker phone, a downtown art broker on hold and an executive assistant

(one of five that work for him) waiting to get an O.K. for his weekend

itinerary. But it is the folder of news clips that he keeps coming back to.

There are many of them, all lovingly copied in color,

crisply collated and presented in tasteful booklets that bear the red and blue

coat-of-arms logo of his Pullman Group. Going back two years, the

articles-“There are over 3,000 of them,” Mr. Pullman says excitedly-all sing

the praises of Mr. Pullman and the bonds he’s created for David Bowie, Ashford

& Simpson, the Isley Brothers and James Brown. “Bond Whiz Spins Notes into

Gold,” blares one headline; “David Pullman: $55 Million Man,” reads another.

His beaming, toothy visage adorns many of them. “This is my favorite,” he says,

pulling out a recent Time piece that

dubbed him one of the top 100 innovators of the new millennium. “I like this

one, too,” he says of a Wall Street Journal

Workspaces article. A photo shows him grinning at the camera in his office.

“Because it’s not about my work-it’s about my office.”

Mr. Pullman, 38, loves his workspace. He is of medium

height, and has yet to give in to a balding pate sparsely covered by a tangle

of wiry dark hair. He bounces around his upper Sixth Avenue office like a kid

in a candy store, streams of words and sentence fragments gushing from him.

There is so much to show a visitor. (For a closeup of the reception room, the

wall paintings and the view of visitors from Mr. Pullman’s desk, go to the

virtual-office tour at http://www.pullmanco.com.)

There’s his modern art collection, his series of Broadway

and dance posters-all signed by the actors and dancers-the autographed photo of

his favorite Pennsylvania ballerina, Dede Barfield (“For David, you’re a great

friend. Much love always, Dede”). And, of course, his pride and joy: a

collection of gold and platinum records, framed and hung on the wall,

testifying to his bond deals. A gold record for David Bowie. Platinum ones for

Ashford & Simpson, James Brown and the Isley Brothers. “Presented in great

appreciation to David Pullman, founder, chairman and C.E.O. of the Pullman

Group,” they read. “We give these out after every deal. They are unique. You

can’t get these. It takes six months to make them,” he enthuses.

All of it-the clippings, the mounted records, the office,

the assistants-represents a small measure of Mr. Pullman’s fame. And it all

stems from what he claims was his idea to cash in on the future earnings of

music legends. For Mr. Pullman, it was an epiphany. No more flogging of

mortgage-backs-now he would rub up close to the likes of Mr. Bowie and Mr.

Brown; now he, too, could be a rock star. And he would enjoy the trappings: the

profiles in the glossies, the nightlife, the clout. All of a sudden he was a

Player, and wasn’t it fun?

But this idea that the press so loves-how hot is it? And did

Mr. Pullman even come up with it? In August of this year, for example, a state

court ruled that Mr. Pullman could claim no ownership of the Bowie Bond

intellectual property.

And the market itself? No

more than another niche business, said Bill Zysblat, a target of that lawsuit

and a competitor, to be sure, but one who sees the market as limited.

“After the Bowie deal in

1997, we all thought the music royalty market could be as large as $1 billion,”

said Mr. Zysblat, of the competing firm EFI Entertainment. “That turned out not

to be the case. The market now is no more than $100 million, and higher interest

rates don’t help either.”

Mr. Pullman contends that business has never been better. He

says he has booked $105 million worth of deals since the Bowie offering, and he

expects the Marvin Gaye deal to be in the eight figures. Life, by his own

account and that of his hard-working publicist, is good.

The proof: five records on the wall and 3,000 articles. But

at the moment, he is concerned about the next one. “Do you think there will be

a problem with my five o’clock shadow?” he inquires of a photographer as he

rubs his chin. “I really did shave today, but early. I’ve got a thick beard,

don’t I?” he asks with a burst of laughter.

Banking on Bowie

Four years ago, Mr. Pullman, a graduate of Wharton, was but

an anonymous investment banker in charge of the structured-asset sales group at

Gruntal & Co. One day he met Mr. Zysblat, the business manager for David

Bowie, who at the time was looking into ways to financially leverage the rock

star’s extensive song catalog.

According to Mr. Pullman, it was his idea: Let’s issue a

bond, securitized by the royalties that flow from all the David Bowie songs out

in the market. Mr. Bowie gets a chunk of cash, and institutional investors get

an A-rated bond with a richer yield than your standard Treasury issue-plus the

sex appeal of having a David Bowie bond. In January 1997, the deal was done and

Prudential Insurance bought the whole issue-$55 million worth. Mr. Zysblat says

the idea was his: “Pullman was just the placement agent. He sold the bond.

David is a great salesman, but he just can’t get his facts straight.” As for

Mr. Pullman’s Bowie connection, he did nothing more than shake the rock star’s

hand at the deal’s closing, Mr. Zysblat contends.

Sour grapes, responds Mr. Pullman. “You would be defensive,

too, if you were a defendant in a multibillion lawsuit, too. And I don’t see

any deals coming from him, either.” He continues: “I thought of something. It

was new. And I went ahead and did it. People thought I was crazy. Three months

later, it was a good idea. Six months later, it was everyone else’s idea. If I

had failed, it would have been my idea.”

During the Bowie offering, Mr. Pullman moved to Fahnestock

& Co. to focus more on the music-royalty business. He then entered into

talks with Mr. Zysblat, Prudential and assorted other parties to try to form an

entity to make more such deals. It wasn’t to be, and the talks dissolved amid

much acrimony.

By the summer of 1998, Mr. Pullman had founded the Pullman

Group and was set to capitalize on the hoopla surrounding the Bowie Bond

success. Today the firm is the main entity in an admittedly small market,

though others, like Mr. Zysblat, have also ventured in. The Pullman Group

consists of seven analyst-lawyers based in New York and Los Angeles. But Mr.

Pullman is looking to beef up his staff: his Web site is advertising for

analysts-“target deal size $25 to $100 million; go-getters wanted.”

But to get to this point, there were some legal matters to

attend to. In November 1999, Mr. Pullman filed a $2.5 billion suit against his

former colleagues charging theft of intellectual property, trade secrets and

innovative expertise. In August, the suit was dismissed in New York State

Supreme Court. Justice Beatrice Shainswit ruled that, since Mr. Pullman had

been working for Gruntal at the time, he had no proprietary right to any of the

details and models used in the Bowie deal.

Mr. Pullman has already refiled. “We have them on the run

now, which is how we like it,” he says breezily.

The lawsuit taught him a lesson, though: When in doubt, slap

on a trademark. Accordingly, Mr. Pullman has become an obsessive, if not

renegade, trademarker. The company logo-which is also his family shield (as in

the Pullman train-car family, he maintains), a framed picture of which hangs in

his office-is trademarked. Also separately trademarked: the name Pullman

itself, the Pullman Group, Pullman Bonds and the company slogan-“Securitizing

the Future.”

He even trademarks Bowie Bonds in his literature, even

though the U.S. Patent and Trademark office refused in September 1999 to

sanction his use of it. On its Web site, the trademark office refers to the

Bowie Bonds’ trademark status as abandoned. That doesn’t seem to faze Mr.

Pullman; he has asked his lawyers to reapply to the trademark office.

“I’m the only guy on Wall Street who does what I do, so I

have to trademark. I control everything 100 percent, there are no outside

investors. So the shield, the logo, the slogan-I came up with all that. Take

the slogan, ‘Securitizing the Future.’ That was my idea,” he says proudly.

For a while, he considered an initial public offering. “A

lot of the big underwriters wanted to take me public. We had a brand and there

was the Internet and the intellectual property angle, too,” he says. “But I had

privacy concerns.”

He is particularly circumspect about profits. “In terms of

profitability, we are talking eight figures,” he continues. As for his personal

net worth, he is equally mysterious; he admits to investing more than a million

dollars every year into the stock market, but that’s it. “For me,” he says,

“everything is private.”

On the Town

That being said, Mr.

Pullman enjoys the public life. Single, wealthy, semi-famous, he goes out just

about every night, to art gallery openings, charity benefits, his beloved

ballet. He also coaches track in Central Park. And he doesn’t even wear a

watch. “I just have a feeling for time,” he says.

One night in mid-November, he was doing two events: a

preview of the Phillips auction-house contemporary art sale, followed by a

showing of Werner Fassbinder films at MoMA, where he sits on the junior

committee. The art exhibit crawled with bright young art-gallery owners. Mr.

Pullman took in the scene: high white walls, splotchy paintings and the din of

loud cocktail chatter. He seemed to know a good many of the art vendors;

indeed, as an aggressive buyer of modern art, he has bought pieces from a lot

of them.

He is not shy about making conversation. His eye wanders

wistfully from a $250,000 Gerhard Richter painting to the svelte shapes

swirling around him.

A glass of Perrier water always in his hand (Mr. Pullman

does not drink or smoke; no caffeine or soda, either), he moves from one

conversation to the next. Business cards appear magically in the palm of his

hand, taken from a small pocket sewn into the inside of the jacket of his

double-breasted chalk stripe suit. “Take a Polaroid and mail it to my

office-I’ll have it sent to me out in L.A. over the weekend,” he said to a

young woman trying to interest him in an artist’s upcoming exhibit.

“She’s cute,” he said. “Smart, too. She went to Princeton.”

But doesn’t all the socializing wear him down? “Not at all.

It sparks my creativity and keeps me well-rounded. I love talking to these

people … seeing all these exhibits. And you know what?” He laughed. “They are

all free, too.”