LOS ANGELES — D.A. Davidson & Co., a full-service investment firm with a business centered in the Mountain West and Northwest, and Greencoast Capital Partners, a California-based broker-dealer, have entered into a strategic operating agreement.

Under the agreement, D.A. Davidson will provide Greencoast with fixed-income sales, trading, quantitative analytics and related services. Greencoast, a two-year-old boutique firm formed by municipal market veterans with long track records in California, will bring an extensive client roster.

D.A. Davidson has a history in California through other business lines, but opened its first office in a long time in Laguna Beach five years ago and has since opened two other offices in Pasadena and Los Angeles, said David Cheung, senior vice president and chief operating officer of the firm’s fixed-income capital markets group.

“D.A. Davidson was one of the original members of the Pacific Stock Exchange, which went away. When all the exchanges merged, that extinguished the one nexus that we had,” Cheung said.

“We have a long history of doing financial services work in California on different levels,” he said.

D.A. Davidson is part of Davidson Cos., a multifaceted financial services holding company with 1,100 employees headquartered in Montana. Other divisions include Davidson Investment Advisors, a professional asset management firm; Davidson Trust Co., a wealth management and trust firm; and Davidson Fixed Income Management, a registered investment adviser providing fixed-income services to mostly public sector or institutional clients.

Officials at both firms say they began partnering on projects a year ago and decided to strike a more formal agreement.

“If you are in a syndicate or underwriting group, you might share duties,” Cheung said. “We have had selling agreements in place with Greencoast. We have added on quantitative analytics, sales and trading, and other related services.”

The agreement will not be exclusive. However, Mary Neale, principal and founder of Greencoast, said while her firm had been working with D.A. Davidson on roughly 40% of its projects, going forward that number might be more like 80%.

Company officials said it was still too early to put a price on the value of the deal in terms of increased revenues for both companies.

“When you look at the experience that Greencoast and Davidson bring to the table, they are complementary,” Cheung said. “It turns out that what each firm needs to work on is matched by the strengths of the other firm.”

The firms are unlikely ever to have an exclusive agreement, because one size does not fit all, Neale said.

“There could be situations where another arrangement works better,” she said. “I guess we are going steady.”

Neale, who has been active in the municipal market as both an attorney and investment banker since 1987, formed the muni finance firm two years ago, bringing in others with similar experience.

Before founding Greencoast, Neale was a managing director in the muni securities division at Citi, where she focused both on municipal underwriting and delivery of balance-sheet products including swaps, letters of credit and direct purchases of new-issue bonds for the firm’s own account.

Before working at Citi, Neale was national group leader of the public finance department of the law firm Sidley Austin LLP, and was  previously also  a managing partner of the Los Angeles office of Orrick, Herrington, & Sutcliffe LLP.

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