Year in year out the numbers change but the story remains the same for Public Financial Management Inc. The Philadelphia-based firm was ranked the number one public financial adviser for every year since 1989, and in recent years their dominance has only been growing.
In 2000, PFM advised on 524 issues totaling $17.9 billion, taking a 9.2% market share. By 2009 the dollar volume of transactions had nearly tripled as the firm pulled off a record year advising on 829 deals valued at $51.5 billion, 20% more than in 2008. That gave them a 16.4% market share, a record high well above the 10.1% average for the decade, according to data from Thomson Reuters.
PFM was founded in 1975 and focuses on asset management and consulting services for municipalities, cities, schools and hospitals. The firm has 33 offices across the country. As financial advisers they hold a double-digit market share in each region. John White, PFM’s chief executive officer, was unavailable for comment.
Issuers employ financial advisers to assist them in the process of debt issuance while also offering guidance on budgeting and financial planning, and in some cases assisting in reinvesting bond proceeds and the structuring of financial products.
PFM’s footprint was largest in the Southwest where it absorbed 19.4% of all deals in 2009, working on 368 issues that add up to $11.9 billion. In the Northeast the firm cut a smaller slice of the market at 16.2%, but the pie is bigger there so the transaction volume was greater at $18.6 billion.
In the Southeast PFM worked on 14.1% of all transactions with a total value of $9.8 billion, and in the Midwest it snatched 12.1% of the market, working on 246 deals worth $7.9 billion.
Only in the Far West did it take a second seat. There, Public Resources Advisory Group was clearly dominant advising on 24.1% of all deals, or 53 issues worth $22.8 billion. The reason is clear: PRAG was last year the top adviser for the state of California, which flooded the muni market with more than $23 billion, almost three times more volume than in 2008.
Nationally, PRAG was bumped up one spot to rank second in 2009 with a 13.5% market share. It advised on 172 deals worth $42.5 billion, which is more than double the volume they worked on in 2008. For the decade, the firm was also ranked second but its market share was much lower at 6.8%.
PRAG was established in 1985 in New York City and has offices in Los Angeles, Philadelphia, St. Petersburg, Fla., Oakland, and Boston. Edmund Soong, executive vice president in Los Angeles, was unavailable for comment.
In third place for 2009 adviser rankings was Texas-based First Southwest & Co, which fell from second in 2008. The firm took a 7.3% market share last year advising on 581 deals valued at $22.9 billion. For the decade the firm also ranked third with a 4.9% cut of the market.
Other notable movements in the national rankings include KNN Public Finance, formerly Kelling Northcross & Nobriga, which saw its ranking jump from 16th in 2008 to 10th last year. The Oakland-based firm worked on 72 deals worth $6.1 billion, a volume that’s 80% greater than the $3.3 billion advised on one year before, according to Thomson Reuters.
Moving in the other direction was Morgan Keegan & Co., which sank 10 spots to 20th last year. The firm advised on $2.5 billion worth of deals in 2009 versus $4.9 billion in 2008.
On small-scale transactions of $10 million or less the stronghold of the larger firms was less solid, as no company took a market share in the double-digits.
PFM still ranked first with 9.7% of all transactions and First Southwest grabbed second spot with 9.4% of the deals, but of the remaining top 10 seven are regional firms absent from the top national rankings.
Ehlers & Associates Inc., an independent firm doing business in Minnesota, Wisconsin, and Illinois, is the third adviser on small deals with a 7.1% market share on 327 deals. Minn.-based Springsted Inc. ranked behind them with 4.4% of the market, and in sixth place is Ross Sinclaire & Associates LLC, an independent firm with offices in California, the Midwest, and the Southeast.
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Corrected January 11, 2010 at 5:58PM: In 1997 the firm was second, behind Public Resources Advisory Group, according to data from Thomson Reuters. In addition, PFMs ranking includes the volume of work done by firms it has since acquired.