Janney Capital Markets has named a new head of public finance as it looks to expand its presence in middle markets.
Tom Henson joined Janney’s Philadelphia headquarters Monday and reports to Steve Genyk, head of fixed income. Henson will be responsible for managing and growing the public finance department and focusing on middle market accounts in areas in which Janney has a presence: the Atlantic Coast, Midwest, and potentially Florida. Henson will focus on deals ranging from $3 million to $100 million.
Mid-market expansion is not new for the firm and Henson said his plans are in line with Janney’s. “The firm’s strategies and goals are in the middle markets,” he said, adding that while some firms focus on $10 million and up, Janney dips below $10 million and will focus on smaller deals “if that’s what the clients want.”
And while some firms have taken on smaller deals than they normally would in this low-issuance environment, Janney’s strategy has remained the same. “Low issuance has not affected us,” Henson said. “Anytime there has been a big negative tax law change in the municipal market, the year following is low issuance. So I think what we’re experiencing is what happens when issuers take advantage of old rules — like what we saw in the fourth quarter of 2010.” He added volume is starting to pick up and market volume should pick up to a normal range here on out.
One of the biggest changes Henson has seen in the market recently is how aggressively banks are looking for loans and that they are more readily lending in the municipal space.
“Also, the spread between taxable and tax-exempt bonds in the short end of the market is very low and people are not as conscious of tax-exemption, and people who normally take advantage of tax-exemptions might be willing to go to a taxable bank solution instead,” he said.
Henson joined Janney from PNC Capital Markets where he ran public finance for eight years. Before that, he spent 20 years with UBS. “I saw that the strategy that PNC wanted to implement in public finance was at odds from what I wanted in my strategy,” Henson said, adding that one of the main reasons he joined Janney was that “where the business is going is more in line with my thinking.” Henson replaced Chris Long who left at the end of March for another opportunity.
In a statement, Janney added that Henson is the eighth high-profile addition to the firm’s fixed-income practice this year, which reaffirms Janney’s continued market momentum and growing standing. “Undoubtedly, Tom is one of the most well-respected and experienced authorities in the realm of public finance, an area that we are strategically developing,” said Dale Foard, head of municipal sales and trading. He “greatly complements the continued strength and ongoing growth of our institutional municipal business.”
Janney has increased its market presence in recent years. In 2007, it ranked 58th as a senior underwriter, participating in $407.2 million of offerings, and moved up to 55th place in 2008, running the books on $406.7 million. In 2007, its average deal size was $10.7, compared to about $10.1 million from 2008. In 2009 the firm put itself on the map, coming in 49th place by underwriting $603.9 million, with an average deal size of about $13 million.
And in 2010, the firm made a larger jump, coming in at 35th place by underwriting $1.37 billion of deals, lowering its average deal size to about $11.1 million.
So far in 2011, Janney Capital Markets is ranked 23rd, underwriting 72 issues worth $708.4 million, lowering its average to $9.84 million per deal.
