Oppenheimer bets on muni sector with new hires
Oppenheimer & Co. has added seven executives in its continued expansion in the fixed income and municipal bond sectors.
This latest push follows its acquisition in June of the San Francisco-based underwriting firm Brandis Tallman LLC., an investment bank, now a division of the larger firm that specializes in the underwriting and placement of municipal debt for California issuers.
“Munis are a significant component of our global fixed income initiative,” said Peter Albano, senior managing director and global head of fixed income for Oppenheimer. “It’s the largest by virtue of head count and the number of offices we have. It plays a key and central role in our fixed income ethos.”
The firm has 56 people working in the municipal space alone, and six of those bankers came through its acquisition of Brandis Tallman in June, Albano said.
The global firm has 90 branch offices across the U.S. and three European offices. The new hires are geographically-representative of the firm’s global reach with four in the New York City office, one in Boston, one in Newport Beach, California, and one in London.
Among the four new executive directors are Hanford Mau, based in the New York office, who will work in the municipal bond department and Joe Curley, who will work on the municipal bond trading desk, out of the Boston office.
The other two executive directors are Ayham Zekra, who will work on the Institutional Fixed Income Sales desk in London and Smahane Grimeh, on the rates strategy and sales desk in New York.
The new managing directors are Si Lund on the high yield and research and sales desk in New York, John Covello on the investment grade fixed income trading desk in New York and Jordan Konicek on the emerging markets institutional sales desk in Newport Beach, California.
When Albano joined Oppenheimer eight years ago, while the firm had a pre-existing presence in munis and fixed income, he saw an opportunity to grow the firm’s reach and to begin to march up the rankings.
The creation of Build America Bonds sparked the interest of international investors that has never dissipated even though the BABs program ended in 2010, Albano said. And since 2018, the rise in taxable munis has increased interest, he said.
“We see a big opportunity to distribute taxable securities abroad,” Albano said. “Roughly 30% of municipal issuance has been taxable, up from 17% the year before.”
The growth in taxables started when advanced refundings were eliminated by the 2017 federal tax bill, but it has been further bolstered by historically low interest rates, Albano said.
As for where Oppenheimer wants to grow geographically, it saw an opportunity to expand on the origination side in California with the Brandis Tollman acquisition, Albano said. The new hires will help the firm expand both its origination and distribution capabilities, he said.
“We are expanding the banking and finance business and sales and trading,” he said.
The addition of Mau “enhances the firm’s syndication capabilities on competitive and negotiated deals.”
Oppenheimer is always looking for people with experience that have solid reputations in their sector, Albano said.
“We will continue to do that,” Albano said. “We are by no means finished.”
Oppenheimer is growing, while some other banks are shrinking, because it sees opportunity in the unprecedented issuance of securities, Albano said.
Issuance in fixed income has grown to $1.5 trillion this year, a 65% increase over last year, he said. Municipal bonds sales year-to-date are at $321 billion, compared to $263 billion last year at the same juncture, he said. Oppenheimer expects the muni market will best the peak reached in 2016, he said.
“We are acting in response to a market that is growing in terms of assets under management,” Albano said. “I think it’s harder for firms that are sized differently. I can’t speak to all the factors that make it difficult for other firms, but our size allows us to be nimble and to expand nationally and globally in response to the market trends we see.”
The hires are reflective of conversations with people that have been going on for several months in some cases, and for several years in others, Albano said.
“We look for people who do well because of who they are, not because of where they are geographically,” Albano said.
For instance, “Joe Curley has been doing this for 40 years, he is a well-known fixture in the trading market. Hanford has built up his resume in ways that are an outstanding fit for our our firm in the syndication, automation and underwriting space.”