worked. Another group has opted to merge with one-time competitors to remain viable.
This new breed of investment banker is now benefiting from the inroads carved by black pioneers in the industry. Arguably, they are poised to learn from their forerunners’ successes, as well as their mistakes.
Today’s investment bankers realize that they have to specialize in a broad array of financial services. That means doing everything from trading stocks and bonds to underwriting corporate equity offerings to asset management. That’s in stark contrast to their predecessors–most of whom focused primarily, if not exclusively, on public finance.
“We have definitely seen an ascension of what I call the ‘New Jack’ young black firms,” says Tony Chapelle, publisher of Securities Pro, a New York-based newsletter that tracks African Americans in the investment industry. Besides Chapman & Co., that New Jack band of African American broker-dealers includes the Utendahl Capital Partners L.P.(No. 1 on the BE INVESTMENT BANKS list),Williams Capital Group (No. 3 on the BE INVESTMENT BANKS list), and Blaylock & Partners L.P. (No. 8 on the BE INVESTMENT BANKS list).
Despite all the changes, the repositioning of black-owned firms in the securities industry does not spell the death-knell of traditional lines of business such as municipal finance. Rather, on the cusp of the 21 st century, black investment banks are aggressively expanding their products and services, and becoming more creative to survive in a fiercely competitive environment.
THE STATE OF THE INDUSTRY
According to the U.S. Equal Employment Opportunity Commission, the 17,462 African Americans who work in the securities industry amount to 8.4% of the 209,048 people in the business. While their presence on Wall Street remains paltry, it is increasing somewhat, according to Ernest Green, chairman of the National Association of Securities Professionals (NASP), a black trade organization.
Changes of another sort are also slowly taking place. This year, the New York Stock Exchange closed to observe Martin Luther King Jr.’s birthday for the first time. That’s a marked departure from the brief moment of silence the Big Board had used to commemorate the date in previous years.
The credit for much of the progress belongs to groups like NASP, as well as the efforts of the Rev. Jesse Jackson and his Rainbow/Push Coalition. In March, for instance, Jackson hosted a three-day conference designed to promote minorities and women on Wall Street. The high-profile gathering, attended by President Clinton, Federal Reserve Chairman Alan Greenspan and numerous Fortune 500 CEOs, turned the spotlight on the lack of diversity in the investment banking business.
The initiative was part of a larger push by Jackson to get corporate America to increase economic ties with blacks via improved hiring practices, granting spots on corporate boards and making investments in the inner cities. Today’s black investment banking pros, however, will tell you that a handout is the last thing they’re looking for.
“When I go into a presentation, I don’t say ‘Where’s that set-aside?’” says James Reynolds Jr., CEO of Loop Capital Markets, a Chicago firm launched in September that has seen its