The financial crisis resulted in the collapse or merger of many firms, but for Samuel A. Ramirez & Co. it was a clear opportunity. Ramirez expanded its underwriting business sevenfold in 2009, ranking them 21st last year compared with 60th in 2008, according to Thomson Reuters.
Ramirez ran the books on 22 issues amounting to $2.7 billion in 2009, compared with $307 million in 2008, the annual rankings show. Its market share was fairly steady at 0.1% for most of the decade but then jumped to 0.7% last year.
The firm has expanded from about 70 people before the financial crisis to 105 today, with around 80% of the staff working directly in municipal finance. Many of the most recent hires joined the firm after careers at the largest banks on Wall Street.
“With the dislocation in the market it’s no secret that there were very good people looking for work,” said Sam Ramirez Sr., the chief executive officer who founded the firm in New York City almost four decades ago. “It not only shows in the rankings but it shows in the awareness of our clients, the issuers. Our performance over the last year has been outstanding.”
In terms of solo management the firm’s biggest deal to date was just last month when they priced $600 million of debt for the Massachusetts School Building Authority, including $450 million of taxable Build America Bonds.
The BABs were priced to yield 125 basis points over comparable Treasuries, a spread that held in the secondary market, which Ramirez said indicates the savings given to the client.
“At bigger firms the strategy is to be all things to all people,” said Ted Sobel, who joined Ramirez last April as head of public finance. “Our focus is to work off of the very strong Ramirez footprint and provide the very best investment banking service.”
“Take our top five bankers and put them in a room — they will stack up equally if not better than the five top bankers from any other firm on the Street,” he said.
Previously Sobel had led the infrastructure group at Banc of America Securities, and prior to that he managed the public finance utility and energy group at UBS Securities.
Ramirez has 11 offices across the country, including Puerto Rico, but the key business is in the Northeast where they ranked 11th last year. The firm managed 13 deals for issuers in the region totaling $2.0 billion — an almost tenfold increase from 2008 — giving them a 1.8% market share.
| Dan Keating |
That kind of growth justifies the slew of recent hires, but chief operating officer Daniel Keating said the firm is maintaining boutique-style mentality even as they aim to be a top-10 underwriter.
“People know that when we’re assigned a major financing, it’s going to get 100% of attention from senior people rather than being passed down a chain,” said Keating, formerly a senior managing director at Bear, Stearns & Co., where he spent 33 years.
“It’s very nimble and very flexible,” he added. “There’s not a lot of bureaucracy to go through to get a decision made. It’s Sam and myself, and we can get things done fast.”
Keating joined Ramirez in October 2008. A former chairman of the Municipal Securities Rulemaking Board, Keating was also given a career achievement award in 2004 by the Municipal Forum of New York.
Not surprisingly, he has a lot of connections. And it is through new relationships that the company has been able to advance its market share.
“Every time we go meet with a new client, I urge them to call the clients we’ve done work for,” Sobel said. “I’d be comfortable if they picked up the phone when I was sitting right there.”
Opportunities can often be hard to come by when the largest eight underwriters control more than 71% of the market share, according to Thomson Reuters.
“It’s easy for clients to pick a top-five firm — they’ve been there, they have recognizable names — so we have to deliver a better product,” Keating said.
