Following a trend of expansion moves by other BE 100S companies, Jackson Securities L.L.C. (No. 7 on the BE INVESTMENT BANKS list with $36.4 billion in total managed issues) merged with Berean Capital Inc. to form a firm with greater geographic coverage.
Announced June 8, the merger plans to capitalize on Jackson Securities’ expertise in municipal bonds and its clients on the East Coast and in California and on Berean’s strength in institutional brokerage and research services from clients located mostly in Midwestern and Southern states. The combined firm maintains the Jackson Securities name.
“What we’re trying to do is build an institution that will stand the test of time and will continue to thrive if something happens to one or both of us,” says Dudley Brown Jr., co-chair and CEO of the combined firm. Jackson Securities was founded by former Atlanta Mayor Maynard H. Jackson, who died in 2003. Brown founded Berean in 1991.
The new firm, with 40 employees, is headquartered in Atlanta and retains a strong presence in Chicago.
Looking at the way other large banks have been choosing to grow, such as the merger of J.P. Morgan Chase & Co. and Bank One Corp., Brown and Reuben McDaniel III, president and CEO of Jackson Securities, say it didn’t make sense for minority-owned firms not to put egos aside and form stronger companies with greater expertise in more business lines.
“Adding personnel to grow is very inefficient,” McDaniel says, “because it takes months for them to get up and running.” Both Brown and McDaniel say they would consider looking at further merger or acquisition opportunities for future expansions.
McDaniel expects the municipal bond business to remain strong at least through the end of 2005 because municipalities continue to take advantage of low interest rates to finance infrastructure projects. While the equity markets have been unstable in 2005, the increase in trading volume over the years provides an opportunity for the institutional trading side of the business, Brown says.
“If I can capture a percent or half of a percent [of trading volume], the numbers look quite good,” Brown says.