No Longer Business As Usual

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

has opened an office in London in an effort to extend its equity and fixed-income trading operation on the international side. But perhaps most important, Williams has completed the application process for membership on the New York Stock Exchange.

Williams Capital will lease a seat, which costs $250,000 or more a year.

By comparison, when Harold Doley bought a seat on the Big Board 26 years ago, he paid $90,000 for it. The most recent seat that the NYSE sold in 1999 went for $2.6 million.

The benefits of having a seat on the NYSE are manifold. For one thing, a seat permits members to offer their clients direct access to brokers on the floor, cutting out middlemen and helping them to achieve faster execution of buy and sell orders. There’s also a major credibility factor involved. Obviously, not all firms can pass muster with the NYSE, which imposes strict reporting standards, net capital rules and other compliance requirements on its members. That will likely help Williams Capital attract investors in Europe, many of whom are brand-name conscious and want to deal exclusively with major firms or those who are members of the NYSE. Still, Williams knows that other African American investment banks, including his own, face other hurdles ahead. "There’s always going to be a perception that small size means limited capabilities," he says. "So the key is to demonstrate that that’s not a fact."

1999 TOP 15 INVESTMENT BANKS SUMMARY

BLACK-OWNED INVESTMENT BANKS 1997 1998 % CHANGE
NUMBER OF EMPLOYEES 311 392 26.05
TOTAL ISSUES (In Billions) $122.539 $144.810 18.17
SENIOR-MANAGED ISSUES (In Millions) $6,114.159 $10,668.85 74.49
CO-MANAGED ISSUES (In Billions) $116.425 $134.140 15.22
Prepared by B.E. Research. Reviewed by Mitchell & Titus L.L.P.
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