CHICAGO - The former head of the now-shuttered municipal bond department of LaSalle Financial Services Inc., Mike Smale, this week joined Chicago-based Cabrera Capital Markets LLC as it boosts its efforts to earn the more coveted sole-senior manager position on bond deals.
Smale's landing at the firm comes about three months after Bank of America Corp. cut most of LaSalle's roughly 30-member municipal team following its acquisition of LaSalle Bank Corp. from ABN Amro in a $21 billion transaction.
Smale started at LaSalle in the mid-1990s as an institutional sales professional after leaving the former Kidder Peabody. He later managed sales and trading and soon took over as manager of the municipal bond group that included banking, sales, trading, and underwriting.
Smale joins Cabrera as a senior managing director in a newly created position with oversight of managing directors in the firm's three business lines: public finance, corporate finance, and equities.
"It's a new position that we conducted a national search for as we continue to grow our business," the firm's founder and chief executive officer, Martin Cabrera Jr., said in an interview this week. "We want to continue to bring in experienced individuals that can help us especially as we go after more senior manager business. We hope to utilize Mike's years of experience and knowledge of the business."
One local banker who had long worked under Smale at LaSalle said it was smart move on Cabrera's part. "Mike is a great facilitator and a great manager and is well-versed in all areas of the business," the banker said. Smale did not return a call yesterday seeking comment.
The firm has won co-senior manager roles on Chicago, Chicago Public Schools, and Illinois deals, but is hoping to see designations as the book-running senior manager occur more frequently. The firm is marketing itself for such a role following an infusion of capital in mid-2007.
The increased capitalization positions the seven-year-old Cabrera firm to run the books on deals of more than "a few hundred million," Cabrera said. He declined to provide a specific limit or the total increased capital that came from investors. Cabrera, 37, is still a majority owner and the firm remains qualified as a minority-owned firm.
Cabrera hopes further growth will elevate the firm beyond one that is "pigeonholed" as a qualified minority-owned company. Still, it's a designation that helps as issuers, especially in urban areas, seek to meet minority participation goals and include both women, African-American, and Latino-owned businesses in their deals.
The firm ranked 140th nationally last year as a senior manager on $28.3 million of debt in six deals, according to Thomson Financial. As a co-manager, the firm ranked 30th nationally on 81 deals totaling $1.7 billion.
As part of its growth strategy, the firm has steadily added staff, including the most recent addition of four sales professionals in its New York office - John Dagher, Neil Olendrop, John Warnick, and Richard Memenger.
The firm also named veteran Chicago-based trader Mitch Kapnik its managing director of sales and trading. The position was previously held by David Johnson, who left the firm in December after helping build up the municipal team.
Cabrera has eight public finance offices in Atlanta, Cleveland, Houston, Los Angeles, New York City, Philadelphia, Santa Fe, and San Antonio in addition to its Chicago headquarters. Its public finance team includes more than 10 bankers and at least a dozen sales and trading and analysts. A staff of 45 that includes all three of Cabrera's business lines will report to Smale. The firm is also interested in hiring additional bankers in California.
The firm opened in 2001 with just a handful of employees from Salomon Grey - a Texas-based financial services firm - focusing on fixed-income products, secondary markets, investment management, and foreign debt and equities. From there it built its municipal desk. Before Salomon Grey, Cabrera had worked for Amerivet Securities, Corporate Securities Group, Olde Discount Corp., and Merrill Lynch & Co.
The firm has won praise from various issuers, including Illinois' chief operating officer John Filan, for its aggressive efforts to bring in orders in the role of co-manager - sometimes a difficult task, as large investors often prefer to deal with senior managers.
While the firm has submitted some joint proposals with firms able to serve as a swap counterparty, Cabrera is considering entering into a more formal partnership with a counterparty. The firm is also looking to expand its ability to offer "different types of products," though Cabrera did not elaborate.