Downturn creates staffing opportunity for one bank. (Wall Street West).

EACH down cycle in the investment banking business, especially in Los Angeles, prompts some bankers to hang out their own shingle or team up to form a boutique.

USBX Advisory Services LLC in Santa Monica, a newish investment banking shop, has started taking advantage of the downturn by picking up talent from some prestigious houses.

Last summer's acquisition of Senior Managing Partner Brooks Dexter signaled the start of a recruiting frenzy at USBX, which has nabbed talent from the old Donaldson Lufkin & Jenrette (now Credit Suisse First Boston), Lehman Bros. and Goldman Sachs.

Recent hires include consumer products banker Pat Turpin, formerly with DLJ; Christy Lowe, once of Goldman; and Rob Schuler, from the old Robinson Humphrey (now part of Banc of America Securities).

Dexter, who banged around the local securities scene for a couple decades, putting in long stints with Lehman Bros. and J.P. Morgan, is the USBX managing director overseeing a crew of 17 professionals, many of them new to the firm.

Is there enough work for these guys? Dexter concedes it is tough, but says there is a living to be made. "I would say activity is off only 20 percent or so," he says of the middle market the firm serves. He defines middle market as deals in the $10 million to $250 million range, and if his numbers bear out, it is a much healthier sector than overall industry statistics that suggest merger action has been cut in half since 2000.

One reason for the relative steadiness in the middle market is that many sellers are privately held businesses, and therefore not answerable to shareholders. Often, they are founders of businesses who wish to retire, or partners who no longer like each other, says Dexter. "For them, it is just time to get out."

Contributing columnist Benjamin Mark Cole writes about the local investment community for the Los Angeles Business Journal. He can be reached at [e-mail].