When Samuel A. Ramirez took his first job out of high school on Wall Street, he never imagined that it would turn into a 40-year career in the investment banking industry and that he would create one of the largest minority-owned securities boutiques in the country.
After all, as a youngster he dreamt of a career in sports — either as a Major League Baseball player or a point guard for the New York Knicks. Instead, he has been at the helm of Ramirez & Co., a full-service securities firm since 1971, and he has no regrets.
Today, the firm manages individual accounts totaling $2.5 billion — more than half of them municipal bonds — and ranks among the nation’s top municipal underwriters.
In 2011, the New York-based firm captured the top spot among minority negotiated senior and co-managers, with $52.44 billion among 200 issues, according to Thomson Reuters. Likewise, the same totals earned the firm the ninth spot among all negotiated senior and co-managers nationwide last year.
Ramirez, 71, said the secret to his success is simple — honesty, integrity and consistency.
“It’s always been about ethics and doing the right thing,” he said. “It’s black and white. … There is no gray, and there are no shortcuts.”
“As a young entrepreneur starting out, you have to have a passion for what you do and your clients must come first,” Ramirez said. “That is how I grew my business.”
He credits his mentors and his staff for being instrumental in the transformation of the fledgling firm into a securities industry empire and the second-largest Hispanic-owned business in New York City, as reported by HispanicBusiness.com.
“Because of the professionals at this firm, we have taken it to another level,” Ramirez said.
The firm has steadily moved up in the rankings and continues to be a strong competitor for municipal and taxable financing across the country, as well as a leader in equities.
“We gain a little market share each year, and municipals are our biggest product,” said Sam Ramirez Jr., senior vice president and managing director of the firm.
Just 10 years ago, the firm ranked 3d among minority senior managers and 59th among senior managers in competitive and negotiated business combined, with six issues totaling $315.5 million, according to Thomson.
Over the years, Ramirez Sr. has also gained industry recognition and professional leadership roles. He is a former board member of the Municipal Securities Rulemaking Board, and past president of both the Municipal Forum and the Municipal Bond Club of New York.
Becoming a Muni Man
Ramirez was born in Manhattan to parents who immigrated to New York from Puerto Rico in the 1920s. He grew up in Brooklyn, where he cultivated a love of sports and was an avid Brooklyn Dodgers fan.
Ramirez attended P.S. 5 and graduated with an economics degree from St. Francis College, where he further honed his baseball skills.
Ramirez cut his teeth in the financial industry in 1960 as an order clerk on the floor of the New York Stock Exchange. “That piqued my interest in Wall Street,” he said during a recent interview in his New York office.
In 1963, he was introduced to municipals as an order clerk at the former Kidder Peabody. There, he worked with mentor and municipal syndicate manager, the late Frank Devers. He was so fascinated by the industry that he did his senior thesis on how the tax-exempt market contributed to the development of the United States between 1940 and 1960.
Upon graduation in 1965, he became a municipal salesperson and trader with Frank Stoever, president of Stoever Glass & Co., then a one-man startup specializing in munis.
That experience sparked the desire to start his own firm, he said. With a book of business he built during six years at Stoever, he opened the doors of his own shop in 1971 in a small two-room office at 19 Rector Street “with no illusions, just a commitment to serving clients,” he said.
The firm consisted of Ramirez and Devers, who became syndicate manager. A month later, Ramirez hired Dominick Quartuccio, a municipal bond trader and former college friend who also grew up with Ramirez in Brooklyn. The trio juggled all the tasks of the business, and made a name for the firm on the Street.
Today, it operates the New York headquarters from an 18,000-square-foot suite on the 29th floor at 61 Broadway, where it relocated in 1977.
Growth and Expansion
The firm currently has 125 employees in 13 branch offices, including major cities like Chicago, Los Angeles, Boston and even San Juan. The firm has 19 institutional sales people, and six full-time traders.
“We feel in this business there’s always room for growth,” Ramirez said, noting that inclusion as a minority firm in underwriting syndicates during its infancy helped open many doors.
Ramirez said the hiring in 2008 of Bear, Stearns & Co. veterans Dan Keating and John Young as chief operating officer and a managing director of underwriting, respectively, was a coup, as the two augmented the already-strong sales, trading, and syndicate underwriting network.
“You can’t put a price on someone knowing the business,” he added.
The full-service boutique offers banking, sales, trading and underwriting of municipals, equities, governments and corporate bonds, as well as investment services ranging from asset and wealth management to retirement and estate planning.
Among all investment classes, Ramirez said principal preservation is a key component when it comes to managing clients’ municipal portfolios, which are largely earmarked for retirement, education or other long-term goals.
In recent years, the firm has added new products to its lineup, such as taxable Build America Bonds, though tax-exempt securities remain its bread and butter, he said. He is a big believer in the philosophy, “Stick to what you know best and do what you have done well.”
The CEO said the company avoided collateralized debt obligations and mortgage-backed securities and that proved just as crucial to the firm’s success as the focus on its core municipal business.
Senior-managed underwriting in 2012 is off to a brisk start. The firm will serve as book-runner for two sizable deals, including a $500 million Illinois general obligation issue, and a $250 million Massachusetts Bay Transportation Authority revenue sale, both slated for mid-March.
Successes and Struggles
To date, the firm’s largest senior-managed municipal bond deal was a $750 million New York City Municipal Water Finance Authority revenue financing in November 2010.
That is a long way since its very first broker-to-broker trade on Jan. 20, 1972, of $5,000 of Nashville GOs to the former J.C. Bradford & Co. at a price of $84.15. The 3 1/4% coupons due in 1981 had a 5.30% yield — less a point. Ramirez has a copy of the framed transaction hanging in his office.
Later that year, the firm underwrote its first municipal bond issue, a $200 million, 40-year loan for New York’s Battery Park City Authority. The 6 3/8% coupon bonds were called, but had a final maturity of Nov. 1, 2012, he said.
Ramirez said serving as senior manager on prominent New York deals, such as the water authority, served as a “springboard” to successfully winning requests for proposals and elevating its reputation as an investment bank nationally.
Meanwhile, one of the biggest hurdles Ramirez ever faced was when New York City defaulted on its municipal notes between 1975 and 1976.
While the situation was dicey, Ramirez conveyed his confidence in the city by continuing to trade its debt. “We felt New York City was not going to disappoint, even though many bonds sold at 50 cents on the dollar,” he said.
Though the municipal default rate remains low these days, credit surveillance is of critical importance to Ramirez, who said he avoids speculation and timing the market, and doesn’t sell anything that he wouldn’t own himself.
“There is no guesswork involved,” Ramirez said.
Quartuccio said Ramirez has staying power because his passion has boosted distribution and growth. “His excitement rubs off on you,” he said.
Keating, who has known Ramirez for 35 years, echoed that sentiment. “He is very positive to work for, cares about his people, and their families. He sets the tone here and is a very good communicator,” he said. “He loves bonds and loves to sell.”
Young said Ramirez makes him feel right at home. “What attracted me to work here was the apparent sustainability, the opportunity for growth, the long-term plan, and a commitment to the employees,” he said.
The firm still serves some second- and third-generation clients whose families opened accounts in 1971, and Ramirez prides himself on maintaining that trust and longevity.
He values the advice Devers at Kidder Peabody gave him as a young order clerk: “You’ve only got one name and you want to protect it, and that, to me, is very important.”
His 43-year-old son said his father’s success is driven by his spirit. “Some people get into this business because they think it’s glamorous and you make a lot of money. My father was successful early on because of his dedication,” he said.
“People saw him as a peer in business,” he said. “When he approached clients they wanted to do business with him.”
Sam Ramirez Jr. said he has inherited strong business ethics. He has been following in his dad’s footsteps ever since he interned at the firm after high school. Besides being a managing director of the firm, he is also president and CEO of Ramirez Asset Management and said he is prepared to assume leadership of the entire company when — and if — his dad ever retires.
But while retirement would leave Ramirez lots of time to play sports with his grandchildren, or even return to the baseball diamond himself from time to time, he said it is not yet in the cards.
“I love what I do, I love the people I work with, and that’s a reward in itself,” he said.