Bull Bear Report Jan 28 2010

Piper Jaffray to Continue Hiring in 2010

By yoree koh

Piper Jaffray Cos. continued its streak of profitable quarters in Q4 last year, and is planning to continue its momentum in 2010 with new hires.

The investment bank ended the 2009 on a high note, swinging to a larger than expected profit in the fourth quarter totaling $12.3 million, or 63 cents a share, compared to a loss of $153.3 million, or $9.78 during the same period the previous year.

The Minneapolis-based firm added 59 senior pros across its businesses last year and is looking to recruit a similar number in 2010, said chairman and chief executive Andrew Duff, in a conference call with analysts Wednesday. Most of the hiring is likely to take place in the earlier part of the year with some preliminary conversations already underway. There are 1,039 employees currently at the firm.

About a dozen of those additional hires will take place in the fixed income brokerage unit, said Duff. The division was boosted with 23 new hires in 2009, bringing the headcount to 123. The team focused on expanding the firm's new capabilities in corporate credits, taxable municipals and mortgages, and increasing its distribution capability.

In light of the disappointing bonus packages expected at some of the bulge bracket firms this year, Duff expects Piper Jaffray is in a competitive position to attract top talent looking to defect.

There has been a shift in the kind of criteria Wall Street pros look when considering jumping to another firm, said Duff, a trend he expects will continue in the new year.

"There's a lot more attention paid, it seems, to us to the type of platform, the culture, the compensation philosophy, and it feels like a much longer-term view that candidates take towards making a decision," said Duff. "We think we can stand up very competitively in that kind of perspective, if you follow me. Not just where can I get a guarantee for a year or two, but where is this platform going, how do I fit? What kind of impact do I have to it? All of those I think we can be well positioned to [net] talent."

The compensation pool at the firm was $281 million for 2009, a 13% increase from the previous year.

Write to Yoree Koh




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