Jefferies & Co. announced yesterday that it had snapped up 20-year veteran James McGinley to run its municipal securities markets group.
McGinley joined the firm Monday after serving one and a half years as a managing director at Barclays Capital, where he ran municipal high-grade, taxable, and proprietary trading, as well as competitive bidding.
Previously, he served a short stint as a senior managing director at Bear Stearns. Before that he was a managing director in portfolio management for Blackrock for eight years and a first vice president in municipal research and risk management at Prudential Securities for nine years.
Kenneth Gibbs, president of the municipal securities group at Jefferies, said his team has grown significantly the past two years.
“We are proud of the liquidity and service we have provided investors in the challenging markets of recent years,” Gibbs said. “We believe Jim will support our customer-focused culture and enhance our capabilities in an innovative and thoughtful way.”
Jefferies has senior managed 38 deals this calendar year totaling $1.98 billion to rank as the 15th largest book-runner, according to Thomson Reuters. Last year the firm ranked 19th with 64 deals totaling $2.92 billion.
The addition of McGinley could be a major step for the 48-year old firm, which first entered the muni market in March 2009 after acquiring Depfa First Albany — then the 17th-biggest managing underwriter and financial adviser for public finance deals.
It would have been difficult to choose a better time for the acquisition, as March 2009 marked the nadir of stock market prices for the decade.
Since announcing the acquisition in February 2009, the stock of parent Jefferies Group Inc. has leapt more than 80%. It closed Tuesday at $22.84, up 2.51% on the day.
The muni market should continue to be a source of growth despite the many media headlines highlighting municipalities’ troubled budgets, according to Gibbs.
“There is tremendous strength in municipal credits that market participants who do not have a long history in the municipal market may not recognize,” he said. “Those strengths will prevail in the face of these many challenges.”
Anticipated strength doesn’t mean the firm isn’t being cautious, though.
“We have all learned through the challenges of this period that one needs to think about risk, fresh everyday,” Gibbs said. “There’s no substitute for doing your homework — it is not a time to take any market or any product for granted.”
In addition to working with Gibbs, McGinley will work closely with Alan Greco, head of municipal trading, and Drew Levinson, head of municipal sales, who both worked at First Albany.
“The market opportunity for Jefferies’ muni business remains strong as we continue to invest in this key component of our firm’s broad strategy in fixed income,” said Tim Cronin, head of fixed income. “We have been pleased with the development of our municipal platform and its exceptional execution capabilities.”
The firm’s muni department includes 90 professionals focused on the banking, sales and trading of municipal securities, according to internal data.
In the broader fixed-income group, Jefferies has nearly 500 professionals globally.
“We see a lot of opportunity in the municipal market and we believe we have a very strong client-focused platform,” Gibbs said. “We’ve provided a lot of liquidity to investors during these challenging markets and as the market continues to evolve, we think we’ll be a major force serving clients.”