Lebenthal Selling Asset Manager, Brokerage Stake to South Street

Lebenthal was founded in 1925 by Alexandra's grandparents, Louis and Sayra, as an odd-lot clearinghouse. Her father James joined the family business in 1967, and began a series of television ads with taglines like "bonds are my babies" as he tried to popularize municipal bonds for investors.

James retired as president in 1995, handing the reins to Alexandra, who was 31 at the time. Six years later, she sold the business to insurer Mony Group Inc.'s Advest subsidiary for $25 million. Merrill Lynch & Co. bought Advest in 2005, retiring the Lebenthal name. In 2007, Alexandra reached a deal to get the family name back from Merrill and revived her family's business as Lebenthal Holdings.

"It's just another chapter in 91 years of a name that's still here — and that, at the end of the day, is something I'm really proud of," Alexandra Lebenthal said in a telephone interview.

Diamond's Atlas Merchant Capital invested in South Street in June 2015. He said in October of that year that he sees an "incredible entrepreneurial opportunity" to invest in financial companies competing with so-called systemically important banks that are facing increasing scrutiny from regulators.

Tabacchi said Tuesday that Diamond has increased his holding to 35 percent since the original investment, making him the firm's largest stakeholder.

Milbank Tweed Hadley & McCloy was South Street's legal counsel. Gordian Group served as investment banker to Lebenthal, and Saul Ewing was legal counsel.