Building Strong Bonds

How Siebert Brandford Shank & Co. L.L.C. became Wall Street�s fastest-growing public finance firm

The summer after Shank’s first year at Wharton, the Savannah, Georgia, native traveled from Philadelphia to New York City “with a subway map and a list of addresses for interviews,” she says. “At that time, all the hot jobs were on Wall Street. I wanted to try it out for one summer.” She accepted an internship with James J. Lowrey & Co. Inc., an independent financial advisory firm that represented city and state governments in bond issuance deals by ensuring bond dealers on the opposite side of the table did their best to save cities and states money in such debt transactions.

Lowrey & Co. was a top firm in its tiny corner of the public finance arena. It was fortuitous that Shank chose to work for the small outfit. Lowrey’s size meant that even as a summer intern, Shank was expected to share her ideas with senior managers and venture out of the office to meet with clients. “It was a very aggressive shop ranked as the No. 1 financial advisory firm when I was there, and I liked the nature of it. That’s where I caught the bug and decided this is what I want to do. I didn’t want to build submarines anymore.” Shank’s engineering roots, however, had given her an edge in public finance: “I know and understand the technical lingo behind the projects. Instead of designing and building infrastructure projects, I’m helping to finance them.”

When Shank finished her studies at Wharton in 1987, she joined Lowrey & Co. as a full-time associate. She logged airline mileage flying from New York to Florida and California, advising Lowrey’s clients such as the City of Miami and the Southern California Public Power Authority. She soon became attracted to the business being done by the bond dealmakers themselves. So, when an associate offered her a job at M.R. Beal & Co. (No. 3 in tax-exempt securities with $1.6 billion in lead issues on the be investment banks list), Shank leaped at the chance to put together deals of her own. The work wasn’t glamorous. “I worked like a dog,” she says. “I’m talking weekends, late nights—around the clock.”

It was Shank’s relentless work ethic that drew the attention of Brandford, her then-competitor. He had gained the reputation as a master of financial deals while assistant to the finance director of Dade County, Florida, in the late 1970s and early 1980s. In 1982, he left public service to take a job as vice president in the public finance group in the San Francisco office of Shearson/American Express. Brandford was soon itching to create his own investment bank specializing in municipal bonds. In May 1985, he and Calvin B. Grigsby, who at the time was the founder and CEO of municipal leasing firm Fiscal Funding Co. Inc., formed a new firm called Grigsby Brandford & Co. Inc.

With Brandford as vice chairman, the new firm developed a national presence and became one of the country’s largest minority-owned investment banks. Brandford called Shank one day in 1991, hoping to steal her away from M.R. Beal & Co.  “The truth is I had beaten Napoleon out of a big deal with the Detroit Public Schools that his firm thought they were going to get. So they came after me,” she says. Shank, lured by the prospect of a larger role in putting deals together, accepted Brandford’s offer.

While at Grigsby Brandford & Co., Shank distinguished herself further as a dealmaker, producing landmark deals such as the $1 billion McCormick Place Convention Center expansion deal in Chicago; downtown Detroit development projects, which included Tiger stadium; and the St. Louis convention center. However, a scandal caused some upheaval at the firm in late 1996. Grigsby, the chief executive, had been accused of being part of a kickback scheme in exchange for bond business in from the Southern District of Florida. Another case charged that Grigsby misused public funds. He was indicted in both cases but later exonerated of all charges. Long before Grigsby’s cases saw their way through the court system, Brandford and Shank, his star bond dealer decided to exit Grigsby Brandford and launch their own firm.

MAKING OF A FINANCIAL POWERHOUSE
Brandford remembers the exact date that he and Shank had dinner with Muriel Siebert to pitch their idea of starting a new firm. “It was September 30, 1996,” says Brandford. “We were trying to get an idea of how best to take advantage of the synergies we brought to the table. Muriel had a retail distribution network to sell bonds to individuals. No African American firm had that capability.” Brandford and Shank were proposing a grand alliance. “She had access to capital and we knew how to go after business,” says Brandford.

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