Bull Bear Report Feb 08 2010

10 Small and Midsize Firms to Watch This Year

By laura lorber

Wall Street's traders and bankers have been voting with their feet since the financial crisis hit. Their verdict: Bigger isn't always better.

A number of the industry's top players are casting their lots with smaller and midsize firms, even as the bulge bracket players return to the talent market. Many small firms offer one big advantage: pay in cash, rather than the stock-heavy packages of bigger rivals.

Barron's magazine spotlighted 10 of Wall Street's "Rising Stars" -- growing midsize full-service firms and smaller specialized firms worth watching. Here is its list, in alphabetical order.

1. Broadpoint Gleacher. The New York City-based boutique investment bank has hired 250 employees in fixed income, banking and equities in client-facing positions since 2007.

2. BTIG. This bicoastal institutional equity and bond brokerage is led by former Spear Leeds & Kellogg partner Steve Starker and backed by Goldman.

3. Cantor Fitzgerald. Cantor has scooped up refugee traders, analysts and bankers from bulge-bracket competitors.

4. Cowen. Ex-Shearson Lehman chairman Peter Cohen is heading this investment bank. Recent hires include four senior executives for a new financial institutions group.

5. Evercore. This advisory-boutique is building out a capital-markets business and an equities unit with trading and sales, underwriting and equity origination, as well as adding an equity-research division.

6. FBR Capital Markets. The firm hired the convertible-securities sales desk of Bear Stearns wholesale and 70 new senior employees in all since 2007.

7. Jefferies Group. The largest U.S. independent broker-dealer, the firm grew its staff by 17% in 2009. Barron's calls it the next Lehman or Bear Stearns -- that is, what they used to be in the good old days.

8. Moelis. The investment-banking boutique started in 2007 with a core group of ex-DLJ'ers and recently added 100 people, growing to a staff of 270. It's now expanding into corporate-finance.

9. RBC Capital. This investment bank, backed by parent Royal Bank of Canada, increased its New York staff by 88% in recent years and is improving its showing in the league tables.

10. Stephens. This independent has been bulking up, recently increasing its investment-banking staff by 40% and its institutional salesforce more than 25%. More hiring is in the works.

Write to Laura Lorber




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