CHICAGO - Kansas City, Mo.-based Oppenheimer & Co.'s capital markets group has hired veteran Chicago-based public finance banker Frank Paul to expand its presence in the region.
The move puts Oppenheimer among the ranks of regional firms that over the last year have established a banking presence in Chicago.
Paul, who is active in the Illinois Republican Party and has worked in public finance for 28 years, was recruited by friend and former state Sen. Roger Keats, who is a senior vice president in Oppenheimer's investments division.
The addition of a banker to Oppenheimer's offices in Chicago -- which also houses a municipal trading desk staffed by Jeff Fannon -- marks the firm's latest move to expand its physical presence in offices across the country that already have established trading desks and brokers who manage high-net-worth private clients.
It's an expansion based on the firm's strategy to remain a "regional" firm that operates nationally. "We want to maintain a regional focus while taking advantage of our national scale," said Brad Max, head of the firm's municipal capital markets group. "We like to keep our bankers close to their clients, our underwriters close to the bankers, and our [salesmen] and traders close to everyone."
The time was right to hire a banker in Chicago based on the firm's sales and trading infrastructure, officials said. Oppenheimer has about 49 high-net-worth brokers in Chicago, described as the "flagship" for the firm's distribution capabilities, according to managing director Thomas Fritzlen. They are among a larger network of 1,600 brokers based in 90 offices in 20 states.
In addition to the retail brokers, Oppenheimer has about 10 institutional sales professionals that work solely on marketing municipal credits. The firm has offices in Boston, Chicago, Detroit, Fort Lauderdale, Kansas City, Los Angeles, Minneapolis, Philadelphia, Providence, and New York, with bankers in all but three of those offices -- Fort Lauderdale, Los Angeles, and Philadelphia. Max said he hopes to hire bankers in the New England area soon.
Oppenheimer ranked 39th among underwriters in negotiated bond sales last year, managing $975 million worth of bonds sold in 92 transactions, according to Thomson Financial.
The firm's concentration in various sectors has varied depending on the focus of its staff, many of whom came aboard following acquisitions. In 2003, Fahnestock Viner Holdings Inc. closed on its purchase of Oppenheimer's private client and asset-management divisions of CIBC Oppenheimer. Oppenheimer and CIBC World Markets Corp. had merged in 1998. After Fahnestock purchased the business, it shifted to the Oppenheimer name.
The firm's Michigan bankers were inherited as part of the firm's acquisition of First of Michigan, which has a strong book of business in public education. Its Minneapolis group of former John G. Kinnard & Co. bankers focused on schools and project financing while the Kansas City group has a strong local government business. The firm's capital markets group is based in Kansas City but its parent's operations are based in New York.
The firm joins Popular Securities Inc., M.R. Beal & Co., Blaylock & Partners LP, and Morgan Keegan & Co. in establishing a banking presence in Chicago since early 2004. Oppenheimer officials acknowledged the difficulties associated with carving out a niche in a competitive environment -- especially when some issuers compile lists of qualified firms in selection processes conducted only once or twice a year.
But they believe the breadth of their distribution capabilities among their private client base -- that includes high-net-worth individuals, institutions, foundations, insurance companies, and small cities -- will be a key selling point in addition to the good number of local trading desks.
"The firm has real 'retail horsepower' that can make a difference in pricing a deal," McGinley said. (c) 2005 The Bond Buyer and SourceMedia, Inc. All rights reserved. http://www.bondbuyer.com http://www.sourcemedia.com
