Bear Stearns M&A head Friedman quits to join PSAM

By Joseph A. Giannone

NEW YORK (Reuters) - Star Bear Stearns Cos' BSC.N mergers and acquisitions banker, Louis Friedman, has quit the struggling U.S. investment bank to join P. Schoenfeld Asset Management LLC, where he will head up a new private investment business.

PSAM, a multi-strategy investment adviser managing $3 billion in assets, said Friedman will join the firm this spring to lead a new strategy focused on private investments and long-term public holdings.

"This professional change represents a unique opportunity for me to continue my career by becoming a principal investor," Friedman said in a statement.

Friedman and Bear Stearns were not available to comment.

The departure deprives Bear Stearns of one of its biggest deal makers just as the bank is struggling to overcome the worst mortgage and credit markets in decades.

Bear Stearns' shares fell $3.94, or 5 percent, to $71.86 in late morning trading on the New York Stock Exchange.

Friedman has served as vice chairman of investment banking and global chairman of M&A at Bear. He was also part of the investment committee for Bear Stearns Merchant Banking.

Friedman joined Bear in 2000 from Donaldson, Lufkin and Jenrette where he built its media and communications M&A business into one of the top teams in that sector. Prior to DLJ, Friedman was a banker at Wasserstein Perella & Co and The First Boston Corp.