CHICAGO — New York-based Rice Financial Products has promoted chief financial officer Cristal Baron to president as the firm seeks to capitalize on its evolution from a derivatives boutique to a full-service broker-dealer by carving out a bigger chunk of book-running business.
“As the firm has grown, so has the business complexity of managing the firm,” said Donald Rice Jr., who founded the firm 16 years ago and has had the titles of both chief executive officer and president. “It seemed appropriate to separate the management of the day-to-day operations of the firm from the broader strategic direction.”
Rice chose Baron to serve in the role of president “because she is truly an extraordinary professional, extremely good with clients and understanding their needs and working well with people here internally.”
Baron’s charge is to lead the firm’s push to join the ranks of top 20 co-managers and senior managers nationally, Rice said.
The firm last year ranked 58th among senior managers nationally, credited with eight deals worth $430 million, and 27th as a co-manager on 119 deals worth $3 billion. Those numbers were up from a year earlier when it ranked 78th nationally as a senior manager working on two deals worth $176 million and 31st as a co-manager working on 54 deals worth $1.5 billion, according to Thomson Reuters.
Baron said she believes the firm has a team in place to achieve those goals, but the firm will keep its eye out for “opportunistic” hires.
“We have undergone a major transformation since 2006 in who we are and what we are trying to do. We have got a good team of professionals and are working well together. We are definitely happy with where we are at this point but we see opportunities ahead of us,” she said.
Rice and Baron became acquainted when Baron worked as a derivatives banker at the former Merrill Lynch & Co., where she started in 1994. She left that firm in 1999 to join the private bank group at JPMorgan, where she focused on business planning, portfolio and asset management, and estate planning for high-net-worth individuals and families. The two continued talking as Baron sought out Rice as a client and Rice offered her the job as CFO in 2002.
In addition to traditional CFO duties like overseeing accounting and tracking expenses and revenues, Baron dug in on other business fronts. She helped with recruitment and hiring, worked on compliance and risk management, met with municipal clients and worked on deal structuring and documentation.
“I always liked executing deals,” she said.
Since Baron joined the firm, it has doubled in size to about 40, including bankers, sales professionals, traders, associates, and analysts. It has expanded from Houston, Columbus, and New York City to include Atlanta, Chicago, Hoboken, Sacramento, and Washington, D.C.
The firm’s latest additions include Janice French as a vice president in the taxable fixed-income group; Alistair Featherstone as an associate; and analysts Vikas Dayal, Chia Siu, and Curry Cheek.
When Rice founded the firm he first worked to build a significant swaps book before shifting focus in 2006 to turn it into a full-service broker-dealer, hiring generalist bankers with established local relationships and boosting its supporting sales and trading staffs.
The timing of its evolution to a full-service underwriter now seems fortuitous. Some issuers have soured on swaps following the downgrades of bond insurers and the financial crisis that ensued after Lehman Brothers’ September 2008 bankruptcy filing. As some issuers attempted to shed floating-rate debt, they faced costly negative swap termination payments.
Concerns over the risks have prompted Pennsylvania lawmakers to consider legislation that would prohibit cities, towns, and school districts from entering into swap agreements. Tennessee last year implemented new rules governing the use of swaps by local governments. Congress and federal regulators also are reviewing the use of derivatives by municipalities.
Rice said the firm remains committed to derivative products as a tool for its clients. He has seen their popularity ebb and flow and believes they will again rise in use.
