New York-based underwriter M.R. Beal & Co. hired two sales veterans to help deal with the growing challenge of selling municipal bonds in the post-Build America Bond era.
Michael Brennan and Paul Zimmerman, both veterans from UBS, joined the institutional sales group as senior vice presidents, the firm plans to announce Thursday.
Both salesmen come directly from Prager, Sealy & Co., where they were vice presidents of sales. Before that, the two worked at UBS Financial Services until the Swiss firm abruptly cut most of its municipal sales staff in May 2008.
“This rounds out a UBS contingent,” said Jay Alpert, executive vice president of Beal’s municipal bond department.
The firm’s head trader, Jim McGinley, and its head underwriter, Fernando Lopez, also worked at UBS.
Stan Grayson, chief operating officer at M.R. Beal, said the two additions upgrade the sales department at a crucial time for the municipal market.
The popularity of the BAB program helped total market issuance hit a record-breaking $433 billion in 2010. With the stimulus program now expired, Grayson said this year’s volume is anticipated to be less than $400 billion.
With lighter volume and smaller deal sizes expected to be the norm this year, it has become all the more important to provide coverage to all sets of buyers, he said.
“Execution on the sales and trading side is something a small firm like ours always has to improve on to get better penetration,” Grayson said.
While the two hires are to work primarily with institutional clients, Beal also formed an alliance in December with TD Ameritrade to tap into a broader network of retail investors.
The partnership followed similar agreements between larger investment banks, including JPMorgan with UBS Wealth Management, and Barclays Capital with Pershing LLC.
“With the loss of BABs you’re going to see retail playing a more important role,” Grayson said, noting the major buyers of BABs were pension funds and international buyers. “Not having [those buyers], I think our job increasingly will be to get retail involved.”
Brennan and Zimmerman began their careers at Shearson Lehman and Prudential Securities, respectively.
Bernard Beal, chief executive of M.R. Beal, said the experience of both new hires will be “a great resource for our clients and for the firm as we continue to expand our municipal finance operation.”