Longtime finance veteran John Rhea acknowledges that Siebert Cisneros Shank & Co. L.L.C. hired him because the investment banking firm is very focused on growth.
Named in June as the firm’s new president of corporate finance and capital markets, Rhea is confident one of the nation’s top bond underwriters can reach its goal.
In fact, Rhea wants to make the division he’s in charge of as renowned on Wall Street as Siebert’s public municipal finance business.
Siebert, (No. 3 in taxable securities, and No. 1 in tax-exempt securities on the BE INVESTMENT BANKS list of the nation’s largest black-owned investment banks), has ranked first as the minority and woman owned municipal finance firm for 18 consecutive years, according to information company Thomson Reuters.
Banking on Becoming the Largest Minority-Owned Financial Firm
Rhea swears Siebert can become the nation’s top minority-owned firm on corporate debt and equity underwriting within the next three years by doing more business with a broader mix of clients from various industries within the capital markets. He estimates that Siebert now ranks among the top six largest minority and business owned firms of its type in that business.
“We want a corporate finance and capital markets business that is commensurate with what we have in the municipal finance business.”
Siebert has grown its corporate finance unit via acquisition and internally since 2014. It has since financed $330.3 billion in global corporate bond issuances and $22.6 billion in global equity offerings. The firm’s corporate transaction volume rose 144% to $62.5 billion in the first quarter of 2017, up from $25.6 billion in the first quarter of 2016, for a wide range of Fortune 500 corporations across industry sectors.
Targeting the Private Equity Market
Rhea aims to add new business in multiple ways. Those include encouraging corporate clients to utilize debt and equity capital markets more to help finance deals. For instance, that could help a company issuing bonds to build a new factory. He plans to leverage and continue leading the solid business Siebert has already accomplished in corporate bond underwriting, which includes underwriting share repurchases and IPOs. Siebert has led equity share repurchases for 28 corporations totaling 497 million shares and $30 billion in principal since 2014.
Plus, Rhea plans to make Siebert’s corporate financing activities in the private equity market, an area where he says minority and women are not scratching the surface yet. He says private equity is a target set that Siebert has not actively pursued before. In general, private equity firms have traditionally accounted for a large amount of revenue or fee income investment banks generate by working with those type of firms as clients.
Private equity is part of a lucrative business. Over the five years to 2017, industry revenue for private equity, hedge funds, and investment vehicles in the United States is expected to grow at an annualized rate of 5.7% to $183.3 billion, according to IBISWorld, a Los Angeles-based research firm. Private equity is expected to account for 58.1% of total revenue.
A Well-Known Player in the Finance Industry
Rhea is convinced that Siebert can provide capital to private equity firms that need financing or debt to help monetize. “Our goal is to be a boutique firm that top private equity firms view as a valuable partner.”
Rhea is well known in corporate finance. He is former chairman of the New York City Housing Authority and a 30-year investment banking professional and corporate executive.
A senior adviser to the Boston Consulting Group, he is founder and managing partner of RHEAL Capital Management L.L.C., a Detroit-based real estate investment and development firm. High-profile properties Rhea’s development group has acquired in downtown Detroit include the historic Fisher and Albert Khan buildings. He also worked for Barclays Capital, JP Morgan, and was a financial adviser for many private equity firms.
Siebert also stated that the firm will explore strategic partnerships under Rhea’s leadership to bring a broader and differentiated set of advisory capabilities to the firm’s corporate clients.
Suzanne Shank, Siebert’s CEO and chairwoman, is excited to have Rhea join the firm.
“It is rare to be able to bring on someone with John’s talent, vision, depth, and range of experience and managerial expertise,” she said in a press release “His substantial corporate investment banking experience at several bulge bracket Wall Street firms and leadership roles in the private and public sectors will allow us to continue to grow and expand both our substantial client base and the depth of our services.”