-
Stifel Nicolaus Weisel, an investment banking firm in St. Louis, has jumped to third from sixth place among bank deal advisors this year.
October 15 -
Keefe, Bruyette & Woods, looking for momentum after a tough year, adds investment bankers James Harasimowicz and Joseph Gulash to its bank M&A team.
January 3 -
Business moves under his leadership contributed to the investment firm's struggles, and his dealmaking skills will be needed to make up ground on rivals like Sandler.
October 28
KBW has survived a number of hardships over the years, including the death of a third of its staff in
In the end, the 50-year-old New York investment banking firm best known as Keefe, Bruyette & Woods fell victim to rote ailments that have wrecked many of its bank customers — a lack of diversification and a crippling slowdown in business. Going public may have exacerbated its problems.
KBW,
Sandler and KBW have an intense and complicated rivalry. Both lost considerable staff on Sept. 11, and each has struggled with the historic slump in bank M&A in recent years.
Sandler has pulled ahead this year in the all-important bank M&A league tables partly because it stayed private, having sold a minority stake to the private-equity firms Carlyle Group and Kelso & Co. in 2010. That gave it the capital to expand while ensuring that any financial problems stayed out of the limelight.
KBW went public in 2006, a decision that ultimately proved fatal by funding a poorly timed expansion and opening up the firm to additional scrutiny.
Image is everything on Wall Street. KBW's very public financial problems (it lost $3.1 million in the third quarter) have cost it clients, talent and prestige.
While KBW has been forced to consolidate office space, lay off more than 100 people and get out of asset-management,
KBW lost a team of Boston-area investment bankers in 2009 to Sterne Agee & Leach.
Oriental Financial Group, which KBW advised on a failed-bank acquisition in 2010, hired
Jefferies to handle
KBW has had management issues, too. In 2000, then-CEO James McDermott Jr. was convicted of insider trading for leaking information about five bank mergers.
John Duffy, who rebuilt the firm after 2001,
KBW was founded in 1962. It became one of the first, if not the first, independent investment banks to specialize in bank M&A. Business soared as deregulation of interstate banking led to a boom in bank M&A. It became dominant in that field because it had access to reams of banking companies' financial statements in a pre-Internet age, as it had started as a community and regional bank investment research specialist.
Duffy himself advised on deals that created Capital One Financial (COF), Bank of America (BAC) and other large institutions.
Sandler advised on 25 bank and thrift deals worth $3.7 billion through the third quarter, while KBW advised on 23 deals worth $1.9 billion, according to SNL Financial.