Oppenheimer acquiring boutique San Francisco underwriting firm
Oppenheimer & Co. is acquiring a San Francisco-based underwriting firm with the aim of becoming a significant player as an underwriter and private placement agent in California.
The acquisition of Brandis Tallman LLC, an investment bank that specializes in the underwriting and placement of municipal debt for California issuers, will help grow its public finance presence there, said Bill Reisner, head of public finance investment banking.
The agreement represents the culmination of a year's worth of discussions, said Rick Brandis, co-founder of Brandis Tallman LLC. He and co-founder Nicki Tallman will join the larger firm as managing directors. Details of the financial transaction were not disclosed.
The parties said they hope to close the deal within a few weeks, subject to regulatory review and approvals from the Securities and Exchange Commission.
Oppenheimer, an investment bank, wealth manager and subsidiary of Oppenheimer Holdings took aim at the muni industry in 2017 when it hired Reisner to head public finance. The bank has 50 public finance professional including bankers, traders and sales staff across the country, he said.
The acquisition adds six bankers including the new managing directors.
"We have been quietly building a team of seasoned and senior muni professionals in our capital markets group over the years, Reisner said. "We have the view that public finance is not going away. We take a long-term view on the industry."
Bringing on a team like Brandis Tallman with their experience reinforces what we have been doing, Reisner said.
“I am delighted that Rick, Nicki and their team have joined Oppenheimer,” said Robert Lowenthal, Senior Managing Director and Head of U.S. Investment Banking in a statement. “This acquisition demonstrates our commitment to grow our presence in the California municipal bond market and stand out as a national leader in public finance.”
Tallman has worked in the muni bond businesses since 1993 and Brandis has been working as a public finance professional since the mid-1980s. The pair, like Oppenheimer have a long-term view on the muni market, she said.
"We have encountered many ups and down; the public finance market is always changing," she said. "Oppenheimer's platform will give our clients the best tools to access the market."
Brandis and Tallman has "enormous brand equity and a sterling reputation in California," Reisner said. "We collectively felt it was important to have the name continue with Rick and Nicki, so it's a division of Oppenheimer. The team will fit within our overall capital markets group. Rick and Nicki will report directly to me and I report to our head of investment banking in New York City."
Oppenheimer will have its work cut out for it with the aim of being a major player in California's municipal banking business. The California treasurer's underwriting pool alone contains a list of more than 40 banks. There is a crowded field of investment bankers vying for business in the golden state.
Many bulge bracket banks like Citi, Wells Fargo and BofA Securities have vast muni teams and compete for business in California evidenced by the top five nationally in 2020.
Brandis Tallman has underwritten and privately placed billions of dollars of municipal bonds on behalf of cities, counties, special districts and school districts in California since its founding in 2002, Brandis said. Since 2016, Brandis Tallman has closed 242 municipal bond transactions as sole manager or private placement agent, he said.
Brandis and Tallman will continue to lead their existing team out of San Francisco and Los Angeles, which will operate as a division of Oppenheimer under the Brandis Tallman brand. The duo will both report to Reisner.
The transaction will provide Oppenheimer's high-net worth investors served by Oppenheimer’s private client wealth management business with further access to high-quality California muni bonds, according to the companies.
The current period of heightened economic disruption is attracting investors to the muni space, and the companies expect it will also cause local and state governments to increase bond issuance, they said.
"It is now, more than ever, that these issuers need expert teams and high-caliber bankers to work through whatever situation they find themselves in," Reisner said.
Going forward, Brandis Tallman will have access to the full resources and scale of Oppenheimer to enhance its services and capabilities, including a deep bench underwriting, placement, debt structuring, research, and trading and sales personnel focused exclusively on the municipal capital markets, according to Oppenheimer.
"Whether it is last year, or now, issuers need expert bankers to help them execute transactions," Brandis said. "Obviously the situation is different today with the economic shutdowns, but the need for good public finance professionals remains unchanged."