CHICAGO -Struggling in a competitive market and after cutting more than half of its staff in late December, Oppenheimer & Co. closed its 10-year-old Detroit-based public finance office at the end of March, according to several sources.
The firm's three former bankers have shifted to new jobs within the Michigan public finance market.
As previously reported, Thomas Enright, formerly the managing director of Oppenheimer's public finance group in Detroit, joined Detroit-based Raymond James & Associates Inc. in late March after resigning from Oppenheimer in December.
One of two remaining bankers, Kelli Lambrix, is now a senior managing consultant at Public Finance Management Inc.'s Ann Arbor office. The other banker, Jack Brusewitz, has joined Troy-based Leonard Capital Markets, an investment banking division of Leonard & Co. Brusewitz said he will launch a new public finance division for the firm in Michigan that will serve Midwest clients.
The firm faced tough competition from other broker-dealers, according to a source.
"Michigan is a very competitive state - there are too many bankers going after the deals," said a local investment banker. Of Oppenheimer, the banker said, "The deal flow just wasn't enough to justify the staff." Representatives from Oppenheimer did not return calls for comment.
Oppenheimer last year ranked 14th in Michigan among senior managers with $116.5 million in volume. It ranked fifth in the state in 2004 and 10th in 2005. In the Midwest, the firm last year ranked 32d among senior managers, with $424.6 million in deals, according to Thomson Reuters. In 2006, it ranked 18th in the state as senior managers, with $145.8 million in volume, and 25th in the Midwest.
The firm's public finance department specialized in K-12 financings as well as work with counties and other municipal governments. The Detroit office was Oppenheimer's only public finance office in Michigan, although it continues to operate nearly 20 retail investment branches throughout the state.
Oppenheimer had a public finance presence in Michigan since 1997 when it acquired First Michigan Bank Corp. At that time, public finance bankers Enright, William Roche, and Michael Gormely formed Oppenheimer's public finance group there. Both Roche and Gormely left Oppenheimer in early 2005 to establish the Detroit office for Cleveland-based NatCity. They left that firm less than two years later when its parent, National City Corp., opted to pull out of Michigan. The bankers in 2007 joined Raymond James, where they were reunited with Enright when he joined in March.
Oppenheimer also employed two traders, an analyst, and two administrative assistants in Detroit, many of whom were laid off last December, sources said.
The firm closed the Detroit public finance office on March 31, the last day of a gloomy first quarter in which it reported a net loss of $16.1 million, according to its quarterly reports. It blamed the credit market's "unprecedented downturn" for much of the loss.
In January the company announced it had acquired a large part of CIBC World Marketse_SSRq U.S. capital markets businesses, a move that allowed it to expand its capital markets services, including mergers and acquisitions and loan syndication. As part of the move, the firm borrowed $100 million from CIBC and loaned the money to its broker-dealer, according to its quarterly reports.