Siebert Brandford Shank & Co., L.L.C. (No. 2 in taxable securities with $8.1 billion in lead issues and No. 1 in tax-exempt securities with $6.8 billion in lead issues) prospered from brisk activity in the transportation and public finance world. President and CEO Suzanne Shank says senior managed issues climbed $3.3 billion to finish 2010 at $9.1 billion. She attributes the gain to the firm financing several airport deals stretching from Boston to Los Angeles and running major general obligation bond deals for clients such as the state of California and the city of Chicago. But Shank warned this year could be tougher, saying all investment banks are facing an environment of lower volume for municipal bond issuance as issuers rushed to market in 2010 to take advantage of stimulus bonding programs. Now, she adds, they wrestle with obstacles such as higher interest rates and budget crises.
For private equity firms, buyout activity was driven by attractive financing options in the yield bond and leveraged loan market, says Matthew Toole, global director of deals intelligence at Thomson Reuters. Worldwide private equity-based M&A activity totaled $227.9 billion in 2010, up 92% from $118.7 billion in 2009.
West Hartford, Connecticut-based Fairview Capital Partners (No. 1 on the BE private equity firms list with $3.1 billion in capital under management) saw capital under management remain flat from 2009. The previous year was a time to rethink strategies and approaches, including staying on top of all issues related to compliance, says Co-Managing Partner JoAnn H. Price. Going forward, Fairview is placing more emphasis on providing capital in emerging markets, which will allow for expansion into Sub-Saharan Africa, Latin America, Brazil, Asia, and Australia. All told, Price expects to boost capital by another $400 million in 2011 by doing more business with existing investors, pushing new product offerings, and expanding globally.
Hartford, Connecticut-based Smith Whiley & Co. (No. 8 on the BE private equity firms list with $300 million in capital under management) saw activity remain roughly the same from 2009 to 2010 as well. CEO Gwendolyn Smith Iloani says her firm recently launched a $250 million mezzanine debt fund that will target middle-market businesses in the business services, consumer products, food and beverage, industrial products, healthcare, and technology/communications sectors. “They can use the funding for everything from executing growth strategies to doing management buyouts,” says Smith Iloani of the new fund.
To ultimately succeed, the BE 100s must continue to survey their operations and plot winning strategies. The victors will be those that produce the most flexible business models, provide unparalleled customer service, acquire the best talent, and demonstrate the audacity to win.