First New York Securities LLC, a privately owned investment firm with more than 200 money managers in Manhattan, is expanding its reach into the arena of public finance.
The firm’s new division is being headed by veteran Ross Jackman, formerly managing director of the municipal institutional sales trading business at UBS Securities LLC. He left UBS shortly after June 2008 when it closed its municipal division, and he joined First NY in April.
The firm, whose capital is in excess of $400 million, was founded in 1986. Offices in Manhattan and London trade in domestic and international equities, equity options and derivatives, macro-interest rate products, commodities, and foreign exchange.
“The firm recently expanded into credit fixed income,” Jackman said. “And the municipal market place is an important focus for us.”
He would not comment on specific strategies the firm plans to adopt, but said the approach is “a little different than most others investors in the muni marketplace, and it’s very different than if you’re a mutual fund or some of the hedge funds.” The firm manages the money of five managing partners and has no other outside clients.
Jackman said the general framework is relative-value investing, a tactic Nobel laureate Myron Scholes once compared to a vacuum cleaner “sucking up nickels from all over the world.”
The pioneer of this strategy is John Meriwether of the infamous hedge fund Long-Term Capital Management, a firm that was once the envy of Wall Street for its esoteric, mathematically complex trading models. LTCM’s reputation imploded when its fund collapsed as a result of Russia defaulting on its debt in 1998.
Jackman said First NY’s approach is less quantitative. “We try to identify the best investment opportunities on the credit spectrum and the yield curve,” he said.
First NY envisions the municipal team will grow to 10 or 12 people, and further expansion is possible if the division expands into other areas of credit fixed income.
“We don’t have a set number. If there is a talented person and they want to move to this type of platform we are going to consider them,” Jackman said. “It’s an exciting platform, it’s a strong platform, and it’s very compelling for a lot of people in the marketplace.”
About half a dozen people have been added to the new division this year. First NY has not released names, but one recent pick-up was Dan Friel, a former executive director at UBS Investment Bank.
Friel, who declined to comment for this story, worked with Jackman at UBS for more than three years. He joins First NY as a municipal trader.