Multi-Bank Securities dipping toes into negotiated work

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CHICAGO — Veteran-owned Multi-Bank Securities Inc. has hired its first public finance banker — Chicago-based professional Frank Paul — as it seeks to expand its municipal business by moving into negotiated sales.

Paul joined the Southfield, Michigan-based firm last month as a senior vice president. He is charged with tapping his long-standing relationships and experience with issuers during his 40-year career to get the firm on negotiated issues. He left another veteran-owned firm, Academy Securities, where he’s been since 2012 to join MBS.

MBS is an independent broker-dealer that set up shop more than 30 years ago. It specializes in fixed-income products primarily for its institutional investor clientele and has had a secondary municipal market presence since 2008. It expanded in 2017 to bidding on competitive deals.

“Frank brings decades of municipal underwriting knowledge and immense experience to our business,” the firm’s vice chairman Michael Drews said.

The firm has 10 offices across the country with its trading desk based in New Jersey, said chief compliance officer, Merlin Elsner.

MBS takes expansion in a slow-and-steady fashion and “the time was right for us” to move into negotiated deals, lured in part by the potential for improved margins over those razor-thin ones offered on the competitive side, Elsner said.

The firm five years ago saw a need to deepen its municipal penetration based in part on what existing institutional clients have told the firm. The firm’s decision to begin with a Chicago banking base was driven by its interest in Paul and his contacts in the public finance business, Elsner said.

The firm will start out slowly, going after smaller deals on a case-by-case basis with room to grow if the firm gets comfortable with the risk and likes the results, Elsner said.

The firm is moving into negotiated business as nationally there is a growing number of issuers that are commiting to include veteran-owned firms in their underwriting teams. There are just a handful of firms that meet the qualifications. The designation helps open the door, but then performance is what results in repeat business, bankers and issuers say.

MBS and its parent company, Multi-Bank Services, Ltd., are certified as a New York State Service-Disabled Veteran-Owned Small Business, and it has other similar local and federal designations. The firm has about 140 employees.

The firm’s chief executive officer, founder, and majority owner is David Maccagnone. He left high school to join the U.S. Marine Corps during the Vietnam War. He fought in the siege of Khe Sanh for which he was awarded a Purple Heart. He left the service and in 1972 earned a bachelor’s degree in education. After having difficulty finding a job, due to the weak economy at the time, he returned to the marines for a second tour. He was honorably discharged in 1975.

His securities career began as a retail broker at Merrill Lynch and he parlayed his experience working for a savings and loan company on the certificate of deposit desk to launch MBS Ltd. in 1985.

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