No Longer Business As Usual

A new breed of investment banker is aggressively pursuing corporate accounts and strategic alliances

have more artillery and a larger infantry, you have to operate more on your instinctive survival skills and be more nimble." It also helps, Williams adds, to "identify or develop niches where you can fill in a service that’s not being provided."

Enter Williams Capital.

In 1998, the firm co-managed its first ever major corporate bond deals. Among the companies for which Williams Capital has served as underwriter are Ford, GM, Walt Disney, Wal-Mart, American Express and Con Edison. "That business is profitable and high profile in the market," says Williams, adding: "Our presence there has been very positive."

While acting as co-manager on these offerings, Williams Capital was able to sell bonds to a whole group of money managers and other institutional investors to whom the bulge-bracket firms had paid scant attention. Overall in 1998, Williams Capital lead-managed $1.54 billion in deals and co-managed another $6.11 billion in offerings.

Utendahl Capital Partners L.P. (No. 2 on the be investment bank list) and Blaylock & Partners L.P. (No. 7 on the be investment bank list) have also been highly impressive in the corporate underwriting arena. In 1998, Utendahl lead-managed $1.64 billion in deals and co-managed $9.6 billion. The bulk of the firm’s underwriting business came from corporate bonds, but Utendahl also underwrote some mortgage-backed securities and agency debt.

This year, Utendahl has continued to snag big offerings, including co-managing an offering in January for GTE of California (see "A Strong Bond," Newspoints, this issue). Utendahl’s role in the deal followed the bank’s participation as co-manager in last August’s $6.1 billion corporate bond issue by WorldCom Inc. — a deal that, at the time, was the largest ever issue in the corporate market.

For its part, Blaylock has played a role in the granddaddy of all corporate bond deals. In March, when AT&T tapped the debt market with a record $8 billion offering, Blaylock was one of the eight co-managers on the issue.

According to Securities Data Co., when taken together, minority-owned firms co-managed $20 billion of the $711.30 billion of investment-grade corporate bond deals that came to market in 1998. While that $20 billion figure is but a small piece of the overall pie, it marks an astronomical leap from 1997’s comparable total of just $2.9 billion.

Some observers attribute the sharp rise in corporate underwriting by African American investment firms to the Rev. Jesse Jackson’s Wall Street Project, which seeks, among other things, to increase minority participation in the financial world.

Harold E. Doley Jr., owner of New Orleans-based Doley Securities, is even more emphatic about Jackson’s influence. "The most powerful African American investment banker on Wall Street is [the Rev.] Jesse Jackson," says Doley. "He’s dictating who should be included in deals and everything." Moreover, since Jackson’s Rainbow/PUSH organization is buying shares in a number of Fortune 100 stocks, "his impact on corporate America is truly being felt," Doley adds.

In some ways,

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