The big buyback

Williams Capital Group employees take full stock of future

When Williams Capital Group CEO Christopher Williams makes up his mind to do something, it generally gets done. In 1993, Williams left Lehman Bros. to start his own investment bank. With financial backing from Jefferies Group Inc., a Los Angeles-based global investment bank that
footed a 49% share, Williams set up his limited partnership and jumped head-first into the world of fixed income and equity financing.

By all accounts, Williams Capital Group (No. 3 on the BE 100 INVESTMENT BANKS list with $755 million in senior managed issues) has had stunning success. In four years, it’s served as a co-manager of $2.9 billion in fixed-income financing for some of the nation’s largest corporations, including Walt Disney, Ford and Wal-Mart. But Williams wanted something more, and it wasn’t another client. “From the beginning, the plan was to gradually put more stock in the hands of our employees,” he says.

Planning ahead, he wrote a provision into the original partnership agreement, a provision that allowed the Williams Capital Group to buy out the Jefferies Group’s share by December 1998. Once again, mission accomplished: in July, the Williams Capital Group announced it had repurchased the final 19% ownership interest held by the Jefferies Group, making it a completely minority owned firm more than five months ahead of schedule.

The firm’s new ownership should help boost the confidence that its corporate and public sector clients—including several state and local government pension funds—have in Williams Capital. “Because of our independence, there’s no confusion about who we are,” says Williams.

“More importantly, it’s evidence to our clients that our firm is continuing to grow and implement the plans we’ve outlined,” he says. And if Williams Group’s clients feel better doing business with a minority-owned firm, then that bonus is certainly strengthened by its newly acquired independence.
Perhaps the more significant gain resulting from the deal is an added competitive edge when it comes to hiring top executives and retaining key players. Sharing ownership with those who contribute most to the firm’s growth and profitability “mproves morale, improves the commitment individuals show to the firm and shows that senior management is willing to share some of the pie,” explains Williams. ” Otherwise, your top performers will go out, buy the ingredients and make their own pie.”

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