Piper Jaffray & Co. yesterday said this week it has hired UBS Securities LLC's entire West Coast education and land-secured finance group, a team that consists of bankers and support staff.
This marks the first group from the roughly 125 bankers fired from UBS last week who entered a difficult labor market, both for the municipal market as well as the finance world in general.
Frank Fairman, head of public finance at Piper, said his firm has hired former managing directors Mark Adler who ran the group at UBS and will continue to do so at Piper as well as Tim Carty, Jim Roth, and Jeff Baratta. In addition, former executive director Richard Calabro and director Katie Koster, associate directors Erik Choudhury and Ivory Li, and analyst Jin Kim were also hired. The new titles for the nine were not known.
"Our focus has been looking for opportunities to grow our public finance business," Fairman said. "This group is really an incredible fit."
The group has spent the last decade as the number one underwriter for education debt in California, for K-12 and community colleges, Adler said. It is also one of the top two, with Stone & Youngberg LLC, in terms of California land-secured financing deals.
In 2007, UBS Securities was the number one ranked education underwriter nationally, working on $10.8 billion through 225 deals, according to Thomson Reuters.
New hires at other firms are imminent as well, as market sources have said Bank of America was expected to hire Peter Hill as head of public finance. In addition to Hill, sources said the bank had hired Coleman Cordell and Dominique Piccolo, two former UBS bankers based in Florida. Hill had previously been head of public finance at bond insurer ACA Financial Guaranty Corp.
A spokesman for Bank of America did not return calls for comment.
The new hires are some of the first to be announced after UBS said last Thursday that it would finally shutter its muni shop after first announcing its intentions in May and laid off about 280 employees. May's decision came after UBS announced another $11 billion write-down related to U. S. residential mortgages, bringing its total write-downs to about $38 billion, and hired a new chief executive officer.
Over the last several weeks, market sources had suggested that some firms may look to add a large number of bankers all at once in moves that could potentially reshape the municipal market and add significant market share. Piper Jaffray's announcement appears to be the first.
As the education and land-secured finance group looked for a new opportunity beyond UBS, it sought to keep itself together as one unit, Adler said.
"I was at UBS for 18 years where we built a very small group of three people into a much bigger operation," Adler said. "For us to keep it together as a team was the first goal of this process."
He said six or seven firms placed offers for the entire team, and that they chose Piper Jaffray because of its reputation and the fact that the former UBS bankers felt like they could complement Piper's team, rather than create something new. Adler also said a part of the decision related to Piper's strong commitment to municipal finance, a commitment that seems lacking in some Wall Street firms, he said.
"We certainly liked the platform that we saw at Piper Jaffray," Adler said. "Plus, they had a strong commitment to municipal securities."
Over the last couple of years, Piper Jaffray has continued to look to add to its capital markets division. In 2006, it sold its retail operation to UBS AG and since then it has used the capital from that sale to expand in the capital markets portion of the market, Fairman said. While the recent hires illustrate this plan and the firm's long-term commitment to the market, Fairman said the firm may hire even more bankers in the coming weeks.
"We're continuing to have a few other discussions with UBS bankers," Fairman said. "Those may or may not lead to hiring other people."