Ryan Beck & Co.’s revival of its municipal bond business is off to a very strong start.
A little over four months after the New Jersey-based firm tapped Bonnie Siegal and Hamilton Chang to lead its public finance business, it has more than doubled the size of its municipal workforce by pursuing an aggressive plan to expand its banking and trading capabilities.
“We’ve been able to simultaneously grow our distribution and our origination business,” Siegal said. “Usually, when you build up a business, you start with the infrastructure, which includes sales and trading. But we’ve been able to significantly grow our municipal investment banking and institution sales activities as well as develop our structured and derivative business at the same time.”
Since August, when both Chang and Siegal came over to Ryan Beck from Legg Mason Wood Walker, the firm has added public finance professionals to new offices in San Francisco, Houston, Richmond, Baltimore, and Chicago. The firm also plans to open an office in New Orleans soon. Ryan Beck now has 33 sales and trading professionals, plus nine bankers, up from a total of 16.
The growth of Ryan Beck’s tax-exempt business follows recent industry consolidation. Siegal and Chang were able to recruit many prominent former Legg colleagues after that firm’s retail and capital markets businesses were sold to Citigroup Inc. earlier this year.
| Hamilton Chang |
“I think a lot of people were attracted to the regional mentality here and the fact that there is a real chance to personally contribute,” Siegal said. “There is an entrepreneurial spirit at Ryan Beck where managers are in the trenches contributing to the bottom line, and you may not find that at some other firms.”But while recent industry events may have increased the amount of available talent, it did not make the task of hiring people any easier.
“There was a feeding frenzy out there,” Chang said. “The recent consolidation created a larger pool of well qualified people which expedited the hiring process, but there was equally fierce competition to get them too, which makes the additions all the more gratifying.”
In October, Canadian Imperial Bank of Commerce decided to close its municipal operations, and most recently, Merrill Lynch & Co. purchased Advest Group Inc., which could free up additional candidates.
The move to strengthen Ryan Beck’s public finance business is part of a series of initiatives designed to bolster the national profile of the company’s capital markets group. In January, Lisa Schultz and Jay Suskind were appointed the co-heads of the company’s capital markets group. Initially, the two focused on building the equity and taxable fixed incomes businesses, but they have since turned their efforts to growing their municipal business.
“Municipals are a great compliment to our retail platform,” Schultz said. “We have an aging high–net-worth clientele who are attracted to tax-exempt income, so by building our sales and underwriting efforts, we are better able to deliver our clients more product.”
Ryan Beck, with about 500 financial consultants, was initially founded in 1946 as a municipal bond dealer and is a wholly owned subsidiary of BankAtlantic Bancorp Inc.
Some notable hires on the trading desk include industry veterans Philip Winkelman, who is in charge of underwriting and trading the firm’s variable-rate and auction-rate debt; Dale Foard, who has high-yield and odd-lot expertise; Brendan Shanahan, who specializes in intermediate and long-term investment-grade and zero-coupon bonds; Chuck Yearley, who will focus on intermediate-term East Coast and California credits; and Nancy Infelise, who trades the firm’s short- to intermediate-term general market credits. All joined Ryan Beck from Legg Mason.
“Our want was to build a trading and distribution platform that would readily handle large general market high grade transactions on a consistent basis while also having a noted expertise in credit driven situations,” Chang said. “We have on our team risk managers with noted expertise in specialties such as credit, odd lots, and specific portions of the curve, and a compliment of sales people who penetrate both general accounts and specialty players.”
Prior to coming to Ryan Beck, Chang ran Legg Mason’s structured products group, where he specialized in interest rate swaps and risk management strategies. Before that, Chang was in charge of Bank of America’s West Coast and Midwest municipal derivatives practices.
According to Siegal and Chang, the banking efforts will initially focus on geographic areas where the company can capitalize off its sales and trading footprint. Until recently, Ryan Beck’s banking efforts had been focused in New Jersey, where it ranked 27th in senior managed deals, according to Thomson Financial.
Some prominent additions on the banking side include Randall Dunning, who will coordinate Ryan Beck’s higher education activities, and Garret Strathearn, who will focus on not-for-profit issues. Garth Griffiths, who will serve as Ryan Beck’s representative to various issuers in the Northeast and California, joined Ryan Beck from CIBC World Markets, where he was an executive director.
“Initially, our investment banking will emanate from the Northeast and play to our distribution strengths, but we will be looking to be opportunistic in our expansion efforts,” Siegal said. “Obviously we will do general municipal work in the Northeast and Midwest and Southeast where we have sales teams, but we will also focus on a lot of 501-c3 issues, such as higher education and health care.”
Over her career, Siegal was a manager in the healthcare practices of a number of different firms, including Legg Mason, Ziegler Capital Markets, and the former Donaldson Lufkin & Jenrette. She was also a senior ratings officer in the health care group at Standard & Poor’s.
Ryan Beck’s expansion into the tax-exempt market comes as the market will complete a record year for bond issuance. Total 2005 volume passed $400 billion this week for the first time ever, according to data from Thomson Financial. This year’s growth follows several years of robust debt issuance, raising some questions as to the timing of Ryan Beck expansion efforts should municipal activity cool in the coming quarters.
“We know there are cycles to every business, but we are building a long-term business, not a six-month business. And municipalities will always need to raise money,” Schultz said.
