A Rising Tide.Explosive growth in the securities business gives African American African American Multiculture A person having origins in any of the black racial groups of Africa. See Race. investment banks The following is a list of investment banks Financial conglomerates Large financial-services conglomerates combine commercial banking and investment banking, and sometimes insurance. a boost WHEN THE DALLAS-FORT WORTH INTERNATIONAL AIRPORT
Dallas-Fort Worth International Airport (IATA: DFW, ICAO: KDFW, FAA LID: DFW) is located between the cities of Dallas and Fort Worth,[3] recently needed to raise money to finance part of a $2.5 billion expansion program, more than a dozen investment banks tossed their hats into the ring and scrambled for the business. Among the Wall Street high-fliers vying to land the deal were Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. & Co., J.P. Morgan Securities Inc. and Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. & Co. In the end, however, it was San Francisco-based Siebert Brandford Shank shank (shangk) 1. leg (1). 2. crus ( 2). shank n. The part of the human leg between the knee and ankle. & Co. L.L.C. (No. 2 on the BE INVESTMENT BANK list) that got clearance for takeoff. In March, SBS See Small Business Server. underwrote a $335 million bond offering for the airport, winning the largest municipal finance contract ever awarded to a minority firm in the state of Texas. What did SBS have that its rivals didn't? Simply put, the firm "demonstrated that they have the expertise and capability to meet our expectations," says Vernon Evans, the airport's deputy executive director. Of particular note, the SBS proposal included a plan to market the transaction through a "road show" on the Internet. Highlights of the road snow included a 10-minute video presentation by the airport staff, an electronic version of a credit presentation booklet for bond insurers and ratings agencies, a conference call with institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. and a question and answer session. Going up against Wall Street's top guns is nothing new for African American investment banks. Yet even a cursory cur·so·ry adj. Performed with haste and scant attention to detail: a cursory glance at the headlines. [Late Latin curs look at how businesses like SBS fared in 1999 reveals some dramatic changes in the industry. Most black-owned securities firms added significant numbers of branch offices and staff members to their ranks last year. Many took advantage of the continuing bull market to expand their product offerings. And still other investment houses sought to establish or reinvent re·in·vent tr.v. re·in·vent·ed, re·in·vent·ing, re·in·vents 1. To make over completely: "She reinvented Indian cooking to fit a Western kitchen and a Western larder" themselves as national powerhouses rather than regional players. But the most significant trend to emerge reflects the extent to which technological advances, and especially the Internet, drove business decisions and company operations. Regulatory filings are now handled online and sent to the Securities and Exchange Commission via high-speed modems. Documentation and due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. reports are zipped back and forth by e-mail while financial-services firms enjoy increasingly powerful computer-driven research and analytical tools. And with the wealth of information readily available over the Internet, investment bankers Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. can bone up on virtually any industry, and find out which companies need to raise money via stock or bond offerings. DIVERSIFYING PRODUCTS AND SERVICES Although fixed-income underwriting and sales operations remain important for African American investment dealers, firms are increasingly looking to diversify their product offerings and services. Case in point: Atlanta-based Jackson Securities (No. 10 on the BE INVESTMENT BANK list). A year ago, nearly 100% of the firm's revenues were derived from public finance operations The execution of the joint finance mission to provide financial advice and guidance, support of the procurement process, providing pay support, and providing disbursing support.See also financial management. . Now that the business has delved into corporate and structured finance, company executives are striving for a mix of 40% municipal finance revenues, 40% from corporate transactions and 20% from structured finance deals. The majority of firms report that year-ago revenues and net income were up. "We were profitable for the first time in a long time in 1999, but it's constantly an uphill battle Uphill Battle was an metalcore band with elements of grindcore and noisecore. The group was based out of Santa Barbara, California, USA. History Uphill Battle got some recognition releasing their self-titled record on Relapse Records. to participate in good deals," says Morgan Bassey, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Harvestons Securities Inc. (No. 14 on the BE INVESTMENT BANK list) in Denver. The firm recently co-managed close to $75 million in bond offerings for the Denver Convention Center. For small and large players alike, a greater challenge is trying to break into the ranks of sole or lead managers on major transactions. It's one thing to co-manage a deal or be part of an underwriting syndicate Underwriting syndicate A group of investment banks that work together to sell new security offerings to investors. The underwriting syndicate is led by the lead underwriter. See also: Lead underwriter. underwriting syndicate See syndicate. where an investment bank helps sell a bond issue to individuals or institutions but it takes far more expertise and is much more lucrative for a bank to serve as lead manager or "book-runner." In such a case the firm does everything from due diligence and advisory work to pricing and structuring a bond issue and selling the majority of the securities to be marketed. BLAZING A TRAIL IN CORPORATE BONDS In 1999, only two corporate bond transactions were lead-managed by an African American investment bank. In both deals, New York-based Utendahl Capital Partners L.P. (No. 3 on the BE INVESTMENT BANK list) was given the nod. In September, Utendahl sole lead-managed a 10-year, $300 million bond deal by Coca-Cola Enterprises Coca-Cola Enterprises NYSE: CCE is the largest bottler by volume in the Coca-Cola System. It is the anchor bottler for North America and parts of Europe. The company is the bottler of Coca-Cola and its other soft drink products, and in some areas a few other soft drink Inc. The firm also acted as a joint book-running lead manager in a $450 million fixed-income offering from AT&T. Moreover, as an equity underwriter, Utendahl had a role as co-manager of Pepsi Bottling Co.'s $2.3 billion initial public offering last March. "While our underwriting efforts have always been strong, 1999 was a landmark year for us in the capital markets arena," says John Utendahl John Utendahl is the founder and owner of Utendahl Group, the largest black American-owned investment banking organization in the United States [1]. Mr. Utendahl is considered to be one of the most successful black Americans ever on Wall Street. Mr. , chairman and CEO of Utendahl Capital Partners. "We were the first minority firm to lead-manage over $1 billion of corporate debt transactions." To add more luster to its reputation, Utendahl in 1999 purchased a $1.8 billion asset management division of Atlantic Portfolio Analytics & Management Inc. This now makes Utendahl Capital Management the largest African American-owned fixed-income and convertibles manager in the U.S. with $3.2 billion in assets. As a result of the acquisition, Utendahl opened an office in Orlando adding to its offices in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. . Also last year, the firm launched Urban America L.P., a private real estate fund dedicated to making commercial real estate investments in America's inner city. The fund, which lured such investors as Time Warner President Dick Parsons Parsons, city (1990 pop. 11,924), Labette co., SE Kans.; inc. 1871. It is a shipping point for dairy products, grain, and livestock. Manufactures include ammunition, wire and paper products, plastics, and appliances. and American Express American Express (NYSE: AXP), sometimes known as "AmEx" or "Amex", is a diversified global financial services company, headquartered in New York City. The company is best known for its credit card, charge card and traveler's cheque businesses. President Ken Chenault, recently closed on $100 million of properties. Aside from Utendahl Capital, Blaylock & Partners L.P. (No. 1 on the BE INVESTMENT BANK list) and the Williams Capital Group (No. 4 on the BE INVESTMENT BANK list) are considered the "Big Three" among New York-based African American-owned investment banks. In 1999, Williams Capital lead-managed $1.7 billion in transactions. Notably, the firm also co-managed AT&T Corp.'s historic $4.5 million bond issue and served as the only minority co-manager on a $5.7 billion Wal-Mart deal. For its part, Blaylock & Partners L.P. senior-managed $8.59 billion in offerings last year including serving as co-lead on the $8 billion bond issue from AT&T. Blaylock and Williams Capital were also the only minority-owned firms selected to co-manage the blockbuster $1.8 billion initial bond deal from Goldman Sachs & Co. last year. While African American investment bankers say they are gradually getting a place at the table because of their skills and abilities, some observers attribute growing minority participation in prestigious deals to the Rev. Jesse Jackson's Wall Street Project. For the past few years, Jackson has pushed corporate America to include minority-owned broker-dealers in high-profile stock and bond offerings. Corporate finance deals generate much more lucrative fees than do other types of business. Underwriters are charging companies issuing secondary offerings fees of 3% to 5%. For investment-grade bonds Investment-grade bonds A bond that is assigned a rating in the top four categories by commercial credit rating companies. S&P classifies investment-grade bonds as BBB or higher, and Moody's classifies investment grade bonds as BAA or higher. Related: High-yield bond. , companies pay an average of 1.5% to 2%. Firms like Utendahl Capital, Blaylock & Partners and Williams Capital--which have made diversification their cornerstone--can count on asset management fees to bolster profits during times when underwriting volume is slow or trading and sales business is down. These firms will continue their diversification efforts, aided by the dismantling of the Glass-Steagall Act The Glass-Steagall Act, also known as the Banking Act of 1933 (48 Stat. 162), was passed by Congress in 1933 and prohibits commercial banks from engaging in the investment business. (see "Total Return," this issue). MAKING MONEY IN MUNIS While Utendahl Capital has been a trailblazer among minority-owned firms in the corporate bond and money management arenas, Siebert Brandford Shank is clearly setting the pace in the municipal bond world. In 1999, SBS senior-managed $2.5 billion in municipal offerings, making the firm a heavy-hitter among black- and majority-owned financial institutions. Among the highlights of the firm's lead-managed deals last year was a $25 million offering for Lubbock, Texas “Lubbock” redirects here. For other uses, see Lubbock (disambiguation). Lubbock is the 10th-largest city in the state of Texas.[1] Located in the northwestern part of the state—a region known historically as the Llano Estacado . The $67.5 million new money and refunding issue provided tax relief and significantly reduced borrowing costs for the Chicago Park District The Chicago Park District is the oldest and (financially) largest park district in the nation, with a $385 million annual budget. The park district also has the excellent reputation of spending the most per capita on its parks, even more than Boston in terms of park expenses per , and a $193 million bond deal for the City of Houston. Already this year, SBS has been appointed financial advisor for the Chicago Housing Authority's $1.5 billion public housing plan. The city plans to raise $600 million through a series of two- or three-bond deals to tear down to demolish violently; to pull or pluck down. - Shak. See also: Tear then rebuild dilapidated buildings. "As financial advisor, we'll be helping the Authority to select underwriters, deal with rating agencies, and negotiate with HUD Hud (h  d), a pre-Qur'anic prophet of Islam. Hud unsuccessfully exhorted his South Arabian people, the Ad, to worship the One God. .
Essentially, we'll help them assemble their finance team to begin
the transformation of public housing in Chicago," says Adrienne
Archia, managing director and head of the SBS Chicago office.Plum advisory assignments complement the firm's underwriting strength. In the first quarter of 2000, SBS lead-managed two transactions valued at $357 million. The firm's creative ideas, use of technology, and concentration on a few select areas--such as redevelopment and transportation--are reasons for SBS's success. To prosper in the new millennium, SBS has also adopted a regional approach to covering the country. In 1999, the firm reestablished its Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. branch, opened offices in Washington, D.C., and Miami and doubled the size of its Chicago office. MANAGING UNPRECEDENTED GROWTH Rapid growth is also taking place at other African American-owned brokerages. Last May at Jackson Securities, founder Maynard Jackson Maynard Holbrook Jackson, Jr. (March 23, 1938 – June 23, 2003) was an American politician, a member of the Democratic Party, and the first African American mayor of Atlanta, Georgia. turned over the CEO and president reins to Reuben R. McDaniel III, an ex-Bear Stearns executive who most recently served as managing director of capital markets with Llama llama (lä`mə), South American domesticated ruminant mammal, Lama glama, of the camel family. Genetic studies indicate that it is descended from the guanaco. Co. in Arkansas. Jackson retains the chairman's post and is now responsible for business development and strategic growth, while McDaniel oversees the firm's day-to-day operations. One of McDaniel's early goals was to make Jackson Securities a national firm instead of a primarily Southeast entity. Already, the new CEO has hit the ground running. In the year since McDaniel's arrival, Jackson Securities added a corporate finance division; opened offices in Houston, San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , San Diego, Los Angeles and Chicago; and beefed up its staff from 12 to 26. "Our revenue growth in 2000 will be consistent with this growth in personnel," McDaniel says, adding the firm is already on track to meet its internal targets. Jackson Securities scored two major coups in 1999. Along with J.P. Morgan, the firm co-senior-managed a $1 billion bond deal for the city of Atlanta General Fund. Additionally, it handled a $131.8 million leveraged lease deal for tire maker Michelin North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , whose company was in need of specialized advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal to determine the most cost-efficient way to acquire tire-making equipment. "We analyzed the economics of them buying versus leasing," says McDaniel. "We also examined how any payments would affect Michelin from a tax standpoint." Like McDaniel and Jackson, officials at Loop Capital Markets (No. 7 on the BE INVESTMENT BANK list) have also been on a hiring binge, trying to staff a slew of new branches. In March, Loop opened its sixth office in Sarasota, Florida Sarasota is a city located in Sarasota County on the central west coast of Florida, USA. Its official limits include Sarasota Bay and several barrier islands between the bay and the Gulf of Mexico. , complementing its Chicago headquarters and branches in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , Detroit, Oakland, California “Oakland” redirects here. For other uses, see Oakland (disambiguation). Oakland (IPA: /ˈoʊklənd/), founded in 1852, is the eighth-largest city in the U.S. and Houston. After nearly three years in business, the firm has established its presence in the capital markets. As a major public finance dealer in the state of Illinois; Loop serves as the stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. agent for 12 Fortune 500 companies and has 15 initial public offerings under its belt since launching its equity underwriting business last May. Chairman and CEO James Reynolds James Reynolds may refer to several people:
"Chicago is positioning itself to be the Silicon Valley of the Midwest," Reynolds proclaims, pointing to the rapidly growing number of hi-tech startups in the region. When these companies want to raise money, they often turn to New York-based investment banks. "We want to step in and handle that business," Reynolds says. Moving forward, technology and an increasing reliance on the Internet are expected to play huge roles in the lives of African American investment bankers. But just because the hi-tech revolution presents new opportunities, that doesn't mean traditional areas such as municipal underwriting will be disappearing from the landscape. 2000 TOP 15 INVESTMENT BANKS SUMMARY BLACK-OWNED INVESTMENT BANKS 1998 1999 NUMBER OF EMPLOYEES 392 473 TOTAL ISSUES $144.810 $257.157 (In Billions) SENIOR-MANAGED ISSUES $10,668.850 $18,028.635 (In Millions) CO-MANAGED ISSUES $134.140 $239.428 (In Billions) BLACK-OWNED INVESTMENT BANKS % CHANGE NUMBER OF EMPLOYEES 20.66% TOTAL ISSUES 77.58% (In Billions) SENIOR-MANAGED ISSUES 68.98% (In Millions) CO-MANAGED ISSUES 78.49% (In Billions) Prepared by B.E. Research. Reviewed by Mitchell & Titus, L.L.P. B.E. INVESTMENT BANKS
THIS LAST
YEAR YEAR COMPANY LOCATION
1 7 BLAYLOCK & PARTNERS L.P. New York,
New York
2 1 SIEBERT BRANDFORD San Francisco,
SHANK & CO. L.L.C. California
3 2 UTENDAHL CAPITAL PARTNERS L.P. New York,
New York
4 3 THE WILLIAMS CAPITAL GROUP L.P. New York,
New York
5 4 RICE FINANCIAL PRODUCTS CO. New York,
New York
6 8 M.R. BEAL & CO. New York,
New York
7 14 LOOP CAPITAL MARKETS L.L.C. Chicago,
Illinois
8 5 SBK BROOKS INVESTMENT CORP. Cleveland,
Ohio
9 13 THE CHAPMAN CO. Baltimore,
Maryland
10 6 JACKSON SECURITIES INC. Atlanta,
Georgia
11 11 POWELL CAPITAL MARKETS INC. Roseland,
New Jersey
12 10 WALTON JOHNSON & COMPANY Dallas,
Texas
13 -- GILCHRIST & COMPANY INC. Birmingham,
Alabama
14 15 HARVESTONS SECURITIES INC. Denver,
Colorado
15 9 PRYOR, COUNTS & CO. INC. Philadelphia,
Pennsylvania
YEAR
COMPANY CHIEF EXECUTIVE STARTED
BLAYLOCK & PARTNERS L.P. Ronald E. Blaylock 1993
SIEBERT BRANDFORD Suzanne F. Shank 1996
SHANK & CO. L.L.C.
UTENDAHL CAPITAL PARTNERS L.P. John O. Utendahl 1992
THE WILLIAMS CAPITAL GROUP L.P. Christopher J. 1994
Williams
RICE FINANCIAL PRODUCTS CO. J. Donald Rice Jr. 1994
M.R. BEAL & CO. Bernard B. Beal 1988
LOOP CAPITAL MARKETS L.L.C. James Reynolds Jr. 1997
SBK BROOKS INVESTMENT CORP. Eric L. Small 1993
THE CHAPMAN CO. Nathan A. Chapman Jr. 1986
JACKSON SECURITIES INC. Maynard H. Jackson 1990
POWELL CAPITAL MARKETS INC. Arthur F. Powell 1990
WALTON JOHNSON & COMPANY Jesse C. McRae III 1990
GILCHRIST & COMPANY INC. Harold Gilchrist 1983
HARVESTONS SECURITIES INC. Morgan Bassey 1993
PRYOR, COUNTS & CO. INC. Malcolmn D. Pryor 1981
SENIOR-MANAGED CO-MANAGED
ISSUES(*) ISSUES(*)
(Millions (Billions
COMPANY of dollars) of dollars)
BLAYLOCK & PARTNERS L.P. 8,587.000 35.589
SIEBERT BRANDFORD 2,500.000 18.400
SHANK & CO. L.L.C.
UTENDAHL CAPITAL PARTNERS L.P. 1,920.000 49.427
THE WILLIAMS CAPITAL GROUP L.P. 1,715.000 41.999
RICE FINANCIAL PRODUCTS CO. 774.000 20.163
M.R. BEAL & CO. 565.000 17.500
LOOP CAPITAL MARKETS L.L.C. 464.660 17.824
SBK BROOKS INVESTMENT CORP. 443.549 1.549
THE CHAPMAN CO. 277.000 7.500
JACKSON SECURITIES INC. 237.375 10.963
POWELL CAPITAL MARKETS INC. 204.977 0.846
WALTON JOHNSON & COMPANY 143.000 3.868
GILCHRIST & COMPANY INC. 110.000 0.950
HARVESTONS SECURITIES INC. 75.800 1.730
PRYOR, COUNTS & CO. INC. 11.274 11.120
(*) This is for all issues including, but not limited to, municipal, agency, corporate and mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. for the year ending December 31, 1999. Prepared by B.E. Research. Reviewed by Mitchell & Titus, L.L.P. |
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