Though merger and acquisition activity may have slowed down on Wall Street, Shawn D. Baldwin has been acquisitive, buying financial services businesses with the hope of building a full-service investment bank.
The 35-year-old president and CEO of Capital Management Group Securities in Chicago launched an asset management firm with eight employees last September. Then in November acquired MuniDirect, an Atlanta-based domestic broker-dealer that executes trades for institutional clients such as asset managers, hedge funds, or pension plans. One month later, he acquired KCM Capital Management, an Anguilla-based offshore broker-dealer headquartered out of Chicago and licensed to conduct business overseas without being subject to U.S. taxes.
Baldwin’s firm also acquired the Stature Multi-Allocation Fund, a $56 million hedge fund (a private investment partnership that invests primarily in publicly-traded securities or financial derivatives). All these assets were acquired for roughly $1.2 million of his own money in addition to assumption of debt.
These assets, combined with his recently formed cash-management business (an advisory set up with Bank of America to assist the banking giant with investing its cash-on-hand) and municipal investment banking businesses (a business designed to help municipalities raise cash for capital expenditures such as infrastructure repairs by issuing municipal bonds to investors) are expected to generate $3 million to $4 million for 2002. Baldwin is a member of the Chicago Stock Exchange and holds two seats on the Exchange as well.
Prior to forming the cash management venture, Baldwin was Chief Operating Officer of Wall Street Strategies in New York City, a registered investment-advisory firm that trades on the OTC Bulletin Board under the symbol WSST. He’s currently president of the Chicago chapter of the National Association of Securities Professionals (NASP).
“My ultimate goal is to create an LBO (leverage buy out firm),” Baldwin says. “After a certain amount of time we’ll establish ourselves and get a national presence, credibility, and contacts to raise capital. That’s the end point of the game.” A leverage buy out firm is a company that borrows money to buy interests in other companies, which it uses for spending capital.
To that end, Baldwin is looking to strike partnerships. “I’m looking for a capital partner with deep pockets to expand both operations and our capabilities, increase net capital, and acquire other businesses such as brokerages.”