Wells Fargo Securities named Stratford Shields, a long-time municipal finance professional, to run its public finance business.
He will be based in New York City and start his new job in November, the firm announced on Wednesday.
Shields is coming to Wells Fargo from RBC Capital Markets, where he has been leading that company’s municipal banking efforts in Chicago since 2014 as a managing director and Midwest regional manager.
Previously, he worked at Morgan Stanley for almost 20 years, rising to head of public finance and he has served as chairman of the municipal division of the Securities Industry Financial Market Association. He has also worked for the state of Ohio in various roles. He will be taking over the role that belongedsince 2009to Peter Hill , who in April left Wells to join and build up UBS Wealth Management America.
“He is a proven leader with an accomplished record of building strong teams in investment banking,” Phil Smith, executive vice president and head of Government and Institutional Banking at Wells Fargo, said in a memo to the staff. “Stratford will lead the public finance team as they partner across the bank to provide capital markets solutions to our clients. He will be based in New York, will be a part of our GIB leadership team, and will report directly to me.”
In a phone interview on Wednesday afternoon, Smith added:
“We were pleased with the amount of interest we received in the position. We almost immediately received calls from external leaders in public finance and municipal finance and then we had nine leaders internally in what amounted to a really good pool of candidates”
“We then put together a selection committee, and with all the challenges the industry is facing, we thought where do we want to go from here and who is the best leader for that?" Smith said. "As the process went on, Stratford really started to be the answer to that question.”
Shields started his career on the client side and then spent 20 years to Morgan Stanley, learning the investment banking from the ground up, then rounded out his knowledge at RBC, where he learned the middle market, Smith said, “We find his experience invaluable on where we want to go. He is excited to be here.”
Wells has been dealing with ripple effects from the 2016 fake accounts scandal. The firm was fined $185 million last year by the Consumer Financial Protection Bureau, and more than 5,000 employees were fired over business practices that drove employees to create more than two million new accounts without customers' knowledge or authorization, in order to generate new fee revenue. Municipal bond issuers such as California, Chicago, Illinois, and Ohio have suspended the firm from doing state and state agency bond and financial services business.
Smith said although the firm's negotiated par amount has been affected by the various bans, every other unit of the business is doing well, with some having record years.
“The challenges such as low underwriting spreads and more difficult regulation are seen by all, but we are playing the long game,” he said. “Having world class investment banking coverage is essential, and that is never going to go away. It is easy when everything is selling and investors are buying up municipals, but cycles change and it won’t always be like this. You need to do more than just underwrite bonds, you need to have other tools at your disposal.”
Since 2009, Wells Fargo ranks eighth in the nationwide league tables as managing underwriter. According to Thomson Reuters data, the firm has underwritten over $180 billion of bonds in more than 1,983 transactions in the past nine years.
RBC ranks seventh in the national underwriters rankings, with over $200 billion of business done in the past nine years, according to Thomson Reuters.
“We have a long-standing commitment to best in class service that is the cornerstone of our success over the years including this year’s market share increase,” said Chris Hamel, Head of Municipal Finance, RBC Capital Markets. “We appreciate our many clients who entrust us with their business. We wish Stratford well in his next endeavor.”
In June, Wells Fargo hired four public finance veterans for key roles in its government and institutional banking group as it expanded its housing and higher education teams. Harper Watters joined Wells Fargo as a managing director along with Lawrence Stephens, Rebecca Reape and Matthew Engler as directors.