RBC Capital Markets, a division of RBC Financial Group, will announce today the opening of a new public finance office in Albany and the addition of four veteran bankers to its public finance unit, which the company hopes will bolster its municipal banking presence in New York and the Northeast.
“The opening of the new office and the new bankers that have joined our firm are at the center of our strategic radar and represent out commitment to the Northeast and to the higher education sector,” said Chris Hamel, head of public finance at RBC Capital Markets. “They are talented bankers, and they know their markets well and have an active interest in using RBC’s resources to best service our clients.”
John Puig, a public finance banker who spent 22 years at First Albany Capital Inc., will co-manage the new branch with Ann Flynn, who will continue to run RBC’s New York City and Hartford public finance offices. They plan to operate a general public finance operation with a focus on higher education.
“The platform has all the tools to be competitive: the bank’s balance sheet, the strong distribution, and the network of retail offices across New York,” Puig said. RBC Capital Markets currently has 1,688 retail financial consultants nationwide, including 92 in New York, according to the company.
The expansion into upstate New York comes as the firm is also increasing its presence in California, where it has hired veteran banker Anthony Taddey. (See related story on this page.)
Joining Puig from First Albany is Tom Cullinan. Puig and Cullinan have a noted expertise in the New York region, with experience in the higher education sector as well as with the Dormitory Authority of the State of New York and the New York State Thruway Authority. Betsey McCann, an analyst with First Albany, will also join them.
Also joining RBC are Scott Gibson and Elizabeth Schramek, two senior Advest bankers who will work out of the company’s Hartford office.
According to Hamel, the additions should allow RBC to solidify its hold on the small-issue market, while also leaving it better positioned to capture some larger deals. RBC was ranked 10th nationally in senior-managed tax-exempt debt last year, bringing $18.51 billion to market through 693 deals. But the company ranked first for deals that were $50 million and smaller, bringing $7.12 billion deals to market through 606 deals, according to Thomson Financial.
“The middle market is a stable business opportunity to be active in,” Hamel said. “The issues may be smaller, but issuance in that market is less volatile and more consistent than the large-issuer marketplace.”
The push in upstate New York follows RBC’s long-running expansion along the East Coast since its acquisitions of Dain Rauscher and Tucker Anthony Sutro in 2001. Last year, the company was ranked second in Pennsylvania in senior-managed deals, and fifth in New Jersey. It was ranked 13th in New York in senior managed tax-exempt deals, but management is hoping the new acquisitions will boost that ranking.
The opening of the Albany office follows recent steps RBC has made to expand its U.S. infrastructure and project finance groups. In April, the company hired Stephen Jones, Robert Botschka, Aaron Barman, and Andrew Mendelson to join that area.
The departures from First Albany come as the firm announced this week that it would close its taxable fixed-income corporate bond business due to lackluster results. In the company’s quarterly earnings conference call on Tuesday, First Albany’s chief executive officer, Alan Goldberg, said that even with additional investment to the area, expanding that division would be difficult. Instead, Goldberg said the company would devote its resources to its equity and municipal capital markets areas. The company’s tax-exempt business saw revenue increase by 8% to $8.2 million in the last quarter, including a 102% increase in municipal sales and trading revenue.
Puig said his decision to join RBC was driven by the opportunities there and not the problems in First Albany’s taxable fixed-income department.
Ken Gibbs, the director of municipal capital markets at First Albany, said the closing of the taxable fixed-income business would not have an impact on the company’s municipal finance activities and that the company’s public finance efforts remain quite strong even after the recent departures.
“I have tremendous respect for the bankers who left,” Gibbs said. “But their departure will not disrupt our growth plans as we have a deep team in New York.”
