Brokers: Welcome to the new Street

By Laura Jones

Wall Street and Canary Wharf are dead. Full-service investment banks are broken. And credit sales people are flocking to a new tier of firms. Laura Jones meets the key players.

Rarely has a great industry declined so fast. It was not just the demise of Bear Stearns and Lehman Brothers last year that marked the end of a particular age for the financial markets. It was also the dramatic fall in risk appetite at the remaining "bulge-bracket" firms and the wholesale exodus of staff.

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Comment by: Anonymous. Posted 15 years ago [2009-04-06 14:07:23]

It is a virtuous cycle. These brokers are surviving in the current climate. When the winds of the bull market will blow behind us, the larger banks will "naturally" buy the smaller brokers by hiring entire teams or purchasing the entire company altogether. And everybody will be happy again

Comment by: Anonymous. Posted 15 years ago [2009-04-03 16:21:14]

You missed some big ones. "Libertas" based out of New York, which apparently has a staff of over 100, is one of the more active "regional boutiques" in US Credit. Also, but smaller, "Christopher Street " which was founded by an interdealer broker GFI. Actually, another trend is the one involving these interdealer "brokers -brokers" setting up "upstairs" broker dealers that speak to clients direct. Im hearing there will be more of this. The fine line between "regional boutiques" and "interdealer brokers brokers" is thinning. A lot of salespeople at "regionals" are even getting starter orders from their friends on the bulge bracket dealer desks they worked for , performing a quasi "interdealer role" .

Comment by: Anonymous. Posted 15 years ago [2009-04-03 13:48:11]

Most investment banks are once again making good money out of flow credit business without using up too much capital. There is probably an 18 month to two year window for the new players to establish themselves in this business. Once the market becomes highly competitive again - which inevitably will happen -only a few of these newcomers will remain as serious competitors for the business of a client base which is itself consolidating.

Comment by: Anonymous. Posted 15 years ago [2009-03-31 18:40:14]

Yes, there are a lot of shops and recently unemployed bankers chasing the same space. While the investor community is certainly in need of advice, remains to be seen whether anyone other than the larger players can gain a foothold here... Reminds me of the days when 2 guys and a bloomberg could manage a CDO.

Comment by: Anonymous. Posted 15 years ago [2009-03-31 13:06:34]

Good survey of the larger players. Add to the list all of the 1-5 man "advisory" shops and you get a sense for how low the barriers to entry in the space are. It seems rational however that some of these shops will not only survive, but prosper. It will be interesting to see which ones they are.

Comment by: Anonymous. Posted 15 years ago [2009-03-30 17:29:21]

Nice try at saving a dying market by flogging the wares of these firms. I hope it works.