DALLAS - Six high-level executives from First Southwest Co. have broken away to form their own financial advisory firm in Austin, despite a troubled economic climate.

The new firm, Specialized Public Finance Inc., will cater to mid-sized local governments and special districts in Texas.

First Southwest is the top-ranked financial advisory services firm in Texas and one of the top broker-dealers in the region. Top executives have left the firm in the past to start new companies, but an exodus of this size is unusual.

Managing director Garry Kimball said SPFI will seek clients who want a financial adviser that does not also serve as a broker-dealer. Kimball, who has worked as a banker for First Southwest for 15 years, said he had planned to spend his career at there but wanted to pursue a different business model.

Joining him at SPFI are managing directors Dan Wegmiller in Austin and Vince Viaille in Lubbock, and directors Jeff Garland and Jennifer Ritter Douglas, both in Austin. Steven Adams, senior vice president, left First Southwest last week to join the startup. Adams' clients at First Southwest included the Brazos River Authority.

"We did not reach this decision lightly," Kimball said. "I intended to retire from First Southwest."

As for current conditions in the muni market and the economy generally, Kimball said, "Honestly, it's a horrible time to start a new business." But he said the executives who launched the firm are expected to bring in business based on their reputation and their conservative outlooks.

One former First Southwest client is in the process of switching to SPFI, and others could follow, Kimball said. At First Southwest, Kimball served clients such as the central Texas communities of Georgetown, Bell County, and Temple.

Kimball has served as lead banker on more than 400 bond transactions worth more than $4 billion. He was senior vice president with First Southwest and was a regulatory supervisor for the Austin office, a member of the firm's operating committee, and a member of the firm's special district underwriting committee.

Kimball was appointed to the board of directors of the Municipal Advisory Council of Texas this year, a position he will resign. Before First Southwest, he worked for Dresdner Bank AG in New York and Chicago and the Royal Bank of Canada in Chicago and Dallas.

Wegmiller's clients at First Southwest included the Central Texas Regional Mobility Authority, whose toll bond transaction was named by The Bond Buyer as 2005 "Deal of the Year" in the Southwest Region for its innovative structure. He has served as lead banker on more than 250 transactions and more than $3.9 billion in par amount of bonds.

Viaille has been involved in over 900 financings in his 23-year career. He represented several Texas agencies as their financial adviser, including the Texas Water Development Board, the Texas Higher Education Coordinating Board, and the Texas National Guard Armory Board.

Garland, previously vice president with First Southwest, is the senior quantitative professional at SPFI and will analyze, structure, and price transactions for the firm's clients, the company said. Since entering the public finance industry in 1996, Garland has structured over 700 transactions with a total par amount in excess of $13.3 billion.

Douglas serves as financial adviser to local governments, along with health care and higher education issuers. She has nine years of experience in public finance, including seven years with First Southwest.

Prior to that, she worked as a policy analyst for debt and financial planning for the Government Finance Officers Association in Chicago, where she authored "Conducting a Debt Affordability Study" and "An Elected Official's Guide to Rating Agency Presentations."

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