Houlihan Cuts Jobs Amid Slowdown in Dealmaking

By CONOR DOUGHERTY

Staff Reporter

Houlihan Lokey Howard & Zukin has confirmed a round of layoffs at the Los Angeles-based investment banking firm, amid a drop in merger and acquisition activity industrywide this year.

The cuts come six months after the hiring as chief executive of Franklin Hobbs, who had been chairman of Warburg Dillon Read (now UBS Warburg). Last week, Houlihan announced that Robert Hotz, who had been co-head of investment banking at UBS Warburg, would join Houlihan in the same capacity.

The arrival of Hobbs has led to speculation that he was brought on to raise the firm’s profile and perhaps prime it for an eventual sale in the next few years. While Houlihan is ranked the top investment banking firm for the number of deals completed under $100 million and second for those under $500 million, it pales next to the industry giants.

Houlihan did not announce the job cuts, but Scott Beiser, co-head of investment banking, confirmed in an interview that there were roughly 20 layoffs, or 4 percent of the workforce. The cuts included six employees in the L.A. office, including investment bankers, analysts and associates.

He said the company has no immediate plans for future layoffs, but added that, “we will match our staff size with opportunities in the marketplace.”

Beiser conceded that the firm was looking for more dollar value, but denied that the small business market was being abandoned.

“As our firm has continued to grow we have gotten more aggressive on pursuing larger transactions,” he said. “But we continue to be very active in the middle market.”

Beiser also said the company continues to hire senior level employees, including a new head of the Dallas office, two senior bankers in London, three senior bankers from Andersen in Chicago and three additional bankers in New York, all within the last several months.

Hobbs replaced O. Kit Lokey, a firm co-founder who had been chief executive for over 25 years. Lokey continues as chairman. Hotz was hired with an apparent focus on the East Coast.

The Houlihan layoffs come as little surprise to competing investment bankers who say that with a soft economy and a sour stock market, the corporate finance world has come to a virtual halt.

For the current year through June 11, the value of merger and acquisition deals nationwide was down 58 percent, to $147 billion, compared with the like period a year ago, according to Mergertstat.com, a research firm that is owned by Houlihan Lokey.