M.R. Beal & Co. has opened two new offices in Texas, tapping three executives from Sterne Agee in the process.
In addition to its existing Dallas office, Beal has opened offices in Houston and San Antonio as it seeks to expand in the Southwest. “We have several regional offices and one of our main goals was to add additional bankers in Texas,” said chief operating officer Stan Grayson.
“We see a lot of opportunities in Texas. The state and its urban centers have been active issuers in the municipal market. In addition, there are a lot of medium-sized local governments, hospitals, universities, and non profits that have active capital finance programs.”
He added that the firm is also looking to expand in California and that hiring additional bankers in the Golden State will hopefully happen by year-end. “California is also another state where there has been a lot of activity at the state and local levels, and I think with the right people we can do more for and with our clients there,” Grayson added.
Houston-based managing director Carlos Sharpless is responsible for leading Beal’s Texas business, focusing on coordinating all of the firm’s efforts in the state.
“Figuring out the resources and prioritization of which clients we will pursue is what we are looking for Carlos to do,” Grayson said. “He will be the quarterback of our efforts in the Southwestern region.”
Sharpless came from Sterne Agee, where he was in charge of Southwest operations. He participated in over $25 billion of senior and co-managed transactions.
Richard Acosta also joins M.R. Beal from Sterne, where he will now oversee the new San Antonio office. At Sterne Agee, he was a senior vice president of the U.S. investment banking division. In his new role, he will be focused on a number of San Antonio issuers, as well as other clients around the state.
“Investment banking is a team sport,” Grayson said. “Each one of these individuals is very talented and will work together to provide deep coverage to our present and future clients.”
Brit Stock is also new to M.R. Beal and will join the Dallas office as a senior associate, providing banking and quantitative support to Sharpless, Acosta, and Karl Biggers, who heads the Dallas office. Stock most recently worked at Sterne Agee, Raymond James & Associates, and Bank of America Merrill Lynch.
Grayson said his firm is unfazed by low-issuance in the muni market. “The good news for us is that our size allows us to be somewhat nimble in times like these,” he said. “We still are pursuing the same targets which include many large, frequent issuers, but, for example, with Texas and with the arrival of these new hires, we can also now concentrate on more local governments and school districts.”
He said low issuance means a slight shift in the types of clients Beal is targeting, but “it is still a business of relationships and that game won’t change much.”
“Our expectation is to do significantly more senior management underwriting around the country. The results we’ve been able to achieve in this market have put us in a great position to do more on a going-forward basis,” Grayson said. “A lot of our business is repeat-client business. There are a lot of reasons to hire M.R. Beal, but only one reason to continue to hire us, and that’s performance.”
Since 2007, the firm has increased its market share as lead underwriter, moving up from 49th in 2007 to 21th so far in 2011, according to Thomson Reuters. In 2007, it was book-runner on $543.7 million, and moved up in 2008 to rank 30th by underwriting $1.39 billion. In 2009, it slipped to 35th place, underwriting $1.33 billion in deals, but edged back up in 2010 to 26th place by underwriting $2.4 billion. So far in 2011, Beal is ranked 21st, underwriting $915.9 million of bond issues.
