Oppenheimer 60th Anniversary - 33

1982
Mercantile agrees to purchase Oppenheimer & Co. and its affiliates for $162 million.

brokerage, securities brokerage, and fund management businesses in the United Kingdom, the
United States, and around the world.
In 1982 Mercantile agreed to purchase Oppenheimer & Co. and its affiliates for $162 million. A
New York Times headline proclaimed "Big Oppenheimer Deal: Its Sale."

IRAs CHANGE THE PLAYING FIELD
While Oppenheimer Management Corp. was
growing rapidly, the same couldn't be said about the
U.S. economy overall. Indeed, by 1982 the country
was deep in a recession. The Federal Reserve had
reached the high point of an interest-rate-raising
campaign designed to squash the inflationary spiral
that had held the economy in its grip for nearly a
decade. The Fed's interest rate hikes had begun in
1979; by 1982 a double-digit federal funds rate was

beginning to succeed at tamping down inflation. But
it also slowed lending to a crawl and contributed to a
dire environment on Wall Street, where the Dow
Jones Industrial Average remained below its high set
10 years before. It was in this environment that Spiro
became Oppenheimer Management Corp.'s chairman
and CEO.
The next stage in OMC's expansion arrived like
a bolt out of the blue - and the Firm was never
the same afterward. The deus ex machina came in
the form of the individual retirement account, or
IRA, which in 1982 became widely available for the
first time and immediately became immensely
popular. A major reason for the IRA's popularity
was that its arrival on a large scale coincided with
the beginning of the greatest bull market in history.
Investors, relieved at the Fed's success against
inflation and encouraged by the prospects for future

corporate profits, returned to equities in droves -
pushing the S&P 500 up 21.4% in 1982 and 22.5%
in 1983.
The massive popularity of the IRA led to what
employees who were there still refer to as the "IRA
Season of 1982." The Company sold $400 million
in IRAs that year, and another $600 million by
April 15, 1983. Oppenheimer Shareholder Services
received so many IRA applications that the post
office refused to deliver the Firm's mail. The
Company, flooded with applications, ran out of
places to store them and temporarily resorted to
the executive lunchroom.
The avalanche of applications overwhelmed staff
members hired to process them. "One day I walked
into the kitchen to get a cup of coffee," remembered
Freedman. "I discovered one of our processors sitting
on the floor, crying, surrounded by checks and IRA
applications. It was a nightmare."
Oppenheimer Management Corp.'s IRA business
continued to grow as the bull market raged during
the 1980s. By 1985, Freedman realized that he
needed to upgrade the entire data-processing
infrastructure in order for the Company to offer
high-quality service to advisors and mutual fund
shareholders.

A NEW VANTAGE POINT
The period between the mid-1970s and the
mid-1980s represented a coming of age for
Oppenheimer Management Corp. The Company,
which began 1975 as a division of Oppenheimer &
Co., established an identity independent from its
corporate parent and siblings. It grew dramatically,
expanding its lineup from a handful of stock and
money funds to a broad, diversified family of funds
investing in a comprehensive array of equity,
fixed-income, and money market securities. n
Acquiring Hamilton Management Corp. was one of many drivers
of growth for the Company - growth that brought both successes
and challenges in the last quarter of the 20th century.

American Telephone & Telegraph (AT&T) divests itself
of 22 operating companies, creating the "Baby Bells."

Microsoft launches the Windows 1.0 operating system.
The company also debuts Excel for the Mac.

1984

1985

1975-1986

Restructure and Recession * 33

Oppenheimer 60th Anniversary

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