Added Up

315
Bryant Riley

Bryant Riley may be the boss, but you probably wouldn’t know it by looking at him. The baby-faced chairman of B. Riley & Co., a boutique West L.A. investment bank he founded in 1997, doesn’t wear ties to work, opting instead on many days for jeans and a golf shirt. “It’s pretty casual,” he said of the work environment, which more closely resembles a Web firm than Wall Street. Riley even gave up his corner office for a desk in the middle of the office, near the foosball table. A self-described “numbers guy,” Riley was buying and selling stocks as a teenager in Newport Beach, though not with much success. By college, the budding entrepreneur started selling T-shirts to his fraternity brothers. After stints at a few financial outfits following graduation, Riley started his own firm at the age of 30 and subsequently built it into a formidable player in the local investment banking market. The firm recently advised on acquisitions worth $130 million and $160 million. To keep up with the markets, Riley is in the office before sunrise most days. But that also allows him to go home in time to pick his kids up from school. The Brentwood resident has four kids between the ages of 9 and 15, and spending time with them has become one of his main hobbies. Riley recently sat down with the Business Journal in the firm’s office near the San Diego (405) Freeway to discuss the growth of the bank, how he got into the business, and how he manages to balance time between work and family.

Question: In the buttoned-down world of finance, you don’t often see such a casual office. Why have you opted for this type of environment?

Answer: You know, I was always that way. Our atmosphere is very entrepreneurial. We’re not going to be holding your hand too much and I think that’s reflected in the way people come to work. It’s a nice way to come to work. A lot of the group here plays basketball during the week. Usually there’s like six guys who go out and play basketball and it’s a pretty tight-knit group.

Where?

Either at a local gym or I have a basketball court, a half-court at my house.

Sounds pretty nice.

I think they like it. If you look at the turnover, I think we’ve lost one person to another brokerage firm. We’ve lost other people to hedge funds, but that’s fine. You want that because they become your clients.

When did you first know you wanted to go into financial services?

I was always much more of a numbers guy. I think I started buying stocks when I was probably 14 or 15, and the best thing that happened is I bought losers and figured out very quickly you better know what you’re buying.

How does a 14-year-old know what stocks to buy?

I would buy things, and I think this happens a lot, where you buy what you can see. So one company I bought was, I think, De Laurentiis (Entertainment Group), a movie company, because I thought they were going to have a good movie. I have no idea what the financials are. I don’t know what the debt is. And, of course, it went bankrupt, and so then you say, “Boy, there’s more work (needed.)”

How did a kid buy stocks before the Internet made it so easy?

You bought them from your dad’s broker. I think the first one, I gave my dad about $100 and bought $100 worth of stock that ultimately went to zero.

Where did you get $100?

Paper route. I had a huge paper route.

Did you have any good stock picks?

I straddled the market with options before the market crashed in 1987. So I traded volatility right before it crashed and made a fair amount of money on that. My first big stock, which was right when I started B. Riley or right before that maybe, was Veterinary Centers of America, which you see all over the place – VCA. I felt so strongly, I would go and get my paycheck and buy as much stock as I reasonably could and that worked out pretty well.

Did you play the markets all through college?

Not really. Tom (Kelleher, B. Riley chief executive) and I had a business in college.

You’ve known Kelleher since college?

We went to the same fraternity, Alpha Sigma Phi. So, the way that worked at Lehigh was you get grabbed at night and they take you into this into a bar. The first time I saw him I think he was chugging a beer, actually. He’s my closest friend.

What was the business?

We had a T-shirt business, so we were business partners back then. I was the sales guy and he was the artist. He’s a very good artist. So we had a little business selling T-shirts and underwear to other fraternities.

That’s odd.

Whenever there was a Greek event there would be some people out there, but they were mostly professionals and they’d sell some Greek clothing. We would sell them specifically for those events. We had something call “bed races,” where every fraternity would participate. We’d just walk out and sell 500 T-shirts to fraternity members.

What about the bed races?

Lehigh was on a hill, so the fraternities would make these beds on wheels and you’d race down the hill. It was a little crazy. I don’t know if they do that anymore.

And the underwear?

Our rival was Lafayette, so we’d also do underwear with “Lafayette sucks” on the back.

Other than Kelleher, do you keep in touch with many of your frat brothers?

Yeah, we go to the Final Four every year, about six of us. Since we graduated, so almost 20 years now. We go, but we’ve only gone to one game.

One game?

We usually don’t go to games, we just go to the events. When we first graduated we couldn’t really afford tickets, so we would just go and hang out at the event and we kept that tradition going. They’ve got Final Four parties.

So have your fraternity ties helped in your career?

No, most of my fraternity brothers were engineers. Lehigh’s sports nickname when I was there was the Lehigh Engineers, which didn’t intimidate many people.

What did you do after graduation?

I had a met a guy – Larry Friend – that had a brokerage firm in Orange County when I was maybe a junior in college and he said, “Look, when you graduate, come look me up and I’d love to have you come in.” I went in basically as an intern. I don’t know if I got paid. If I did, it was little.

And from there?

I had an opportunity two years into that to start a firm with a guy who worked for LH Friend – the firm that I worked with – in Dallas. And we started a small operation. So I moved to Dallas, which was interesting. There was a difference in opinion as to how we should grow. I ended up selling my stock and then I came back to L.A. because I love L.A. and worked for Dabney/Resnick, which is now Imperial Capital, and ran equity with another guy there. I went to New York for a couple years, but then came and started this. And that was in 1997.

Was it tough to get the firm off the ground?

I always think of the guy on the pier who has the harmonica, the drum set, and he plays the guitar and he sings. We just did everything. We did research. We did trading. We didn’t have banking for a long time (because) we thought it was important to make sure we established a niche as providing strong research, fundamental research. And once we felt like that niche was established and we saw some opportunities to bring in very senior bankers, we did that.

Has it been difficult to make a name for yourself?

For a long time, it was difficult to get recognition in boardrooms when companies would determine who to hire. They just would not know B. Riley and we spent a lot of time building that up.

Do you think you could do it today?

It would be a lot more difficult now just because the regulations and the requirements from (the Financial Industry Regulatory Authority) are really difficult. It’s just a more regulated business than it was back then, so I think it would be challenging to open up a small brokerage firm … that has as full an offering as we do. I don’t know that you couldn’t for sure. I think you’d need a little more cash. Capital requirements are more now.

Do you expect to grow further?

There’s a huge opportunity for a firm like ours. We are an L.A.-centric firm and 50 percent of our coverage is in California. We wanted to follow local companies where you could go see the whites of the CEO’s eyes and really have high touch. Some of these companies we cover, we’ve covered for 12 years, 13 years. But we think there’s plenty of opportunity to grow here.

Is there anything else you might want to do?

I don’t sing or dance, so…

So they’ll have to carry you out?

Is my wife going to read this? (Laughs.) The nice thing about this business is you can, I think, stay in it. If the stars align, you can be as all in as you want to be but you can also be kind of in, so you can spend time working on a couple things and maybe not be as much involved as I am. I’m 43 – so I think I have a good 20 some years in this before I’d even start thinking about that.

Do you think you have a good work-life balance?

I feel pretty fortunate. I live in a great place. I’ve been married to a great woman for 20 years. I feel really fortunate. Do I regret not having breakfast with my kids? Sure. But I work next to my best friend. It’s a pretty good situation. I’m fortunate.

Do you get to spend much time with your family?

I get in the office somewhere around 5:45. The beauty is you get up early, you’re home early; it gives you a lot more time in the afternoon. I have four kids, so I typically try to get out at 3-ish. The kids usually come home around 3:30, 3:45. And I’ll either pick them up or just be home and we’ll do what you do with 9-, 11-, 13- and 15-year-old kids.

Which is…?

I’m not trying to be superdad, but when you have four kids that becomes your hobby. I like to golf, so the greatest development of the last few years is both my oldest daughter and son play golf, so I can take them out, which is good because that’s a great time to hang out and I get to play golf. I coach a lot of teams. I think I’ve coached over 20 teams in the last six or seven years: soccer, baseball and basketball.

So you’re a coach and an entrepreneur. Do you like telling people what to do?

These are usually 10 years old and under, so I don’t have success telling them what to do. I just love sports. I just love hanging out with my kids.

Do you play many sports?

I like to play basketball, although I’m finding myself getting hurt much easier than I ever did, which is a bummer.

Tell me about your wife.

Carleen. We met on a blind date when I had two months left before I graduated and that was it. I think – you get the lightning bolt where you just know and that was it.

What do you like to do together?

We go to Montana fairly often.

Do you have a house?

Yeah, it’s outside Big Sky. We’ll go in the summer and there’s golf. We ski, white-water rafting, fishing. There’s good fishing there. It’s right near the Gallatin River, which is like “A River Runs Through It.” That’s where that was, so it’s very picturesque. It’s a great way to just get away from all of this. You try and put the BlackBerry down, usually not successfully.

What about down time at home?

I read. I’m reading a book on 1970s baseball right now. I catch up on business. But when you’ve got this biz and got four kids, down time is a rare commodity.

Bryant Riley

TITLE: Chairman

COMPANY: B. Riley & Co.

BORN: Rockville, Md.; 1967

EDUCATION: B.S., finance, Lehigh University in Pennsylvania.

CAREER TURNING POINT: Starting an investment banking firm in 1997.

MOST INFLUENTIAL PERSON: His father, Richard, who taught him business ethics.

PERSONAL: Lives in Brentwood with his wife, Carleen, and their four children.

ACTIVITIES: Playing basketball, golfing, skiing, fishing, spending time with his kids.