businesses, and even re-entering businesses vacated or sold are among the tools executives are implementing to boost profitability.
INVESTMENT BANKS:
TARGETING CUSTOMERS, EXPANSION
As part of the $700 billion rescue package, the U.S. Treasury Department is seeking financial institutions to acquire mortgage-related assets. Included in the legislation is a provision that allows small, minority, and women-owned businesses to take part at a later date. The law says those firms will be designated as sub-managers, but does not spell out required asset sizes of participants. So it’s unclear as to how much black participation, if any, there will be.
Avery Byrd, chairman and CEO at New York-based Toussaint Capital Partners L.L.C. (No. 10 on the BE Investment Banks list with $31.6 billion in co-managed issues), insists that it’s critical that minority firms are participants in the bailout. “Just as you see the political process working to help the larger firms recapitalize and refund themselves, you’re going to need to see that happen in our marketplace or our firms won’t survive,†he says. Indeed, the shifting landscape in global finance has created a new sense of purpose for Wall Street’s black-owned firms. The lessons left behind by the likes of Bear Stearns and Lehman Brothers are clear–evolve or face extinction. Here’s how some firms are adjusting.
It may seem to go against conventional wisdom, but some investment banks are actually expanding, even as they retool operations to tap new markets. Chicago-based Loop Capital Markets L.L.C. (No. 2 on the BE Investment Banks list with $3.2 billion in senior managed issues) recently added 16 people, opened new offices in Orlando, Florida; Washington, D.C.; and Charlotte, North Carolina, and expanded its Los Angeles office. The aim is to boost business across all areas of the firm, including in public finance, corporate finance, fixed income, equity sales, and trading. In the end, it will serve institutional clients better, says Kourtney Ratliff, director of global equity and head of firm-wide branding. “While other firms are more focused on just surviving and cleaning up their balance sheets, we’re coming up with creative and innovative ways to assist our clients with achieving their goals and objectives.â€
BANKS: CONSOLIDATION AHEAD?
For black banks that are struggling, the credit crisis could force them to