Jeff Schiamberg, a New York investment banker for 10 years with Merrill Lynch and Bank of America, never envisioned leaving the world’s financial capital.
That was, until he was laid off early this year.
Schiamberg, like many of the thousands let go from their Wall Street jobs amid the financial crisis, looked to the one sector of the industry hiring through it all: boutique investment banks.
At a time when the biggest firms are still slashing their ranks, boutiques in Los Angeles and across the country have been waiting with open arms to snap up top-shelf talent. Locally, hundreds of those displaced have found homes in firms such as Imperial Capital LLC and Moelis & Co., which like other small firms largely avoided the risky investment instruments that got the larger firms in trouble.
Schiamberg, a native Angeleno, looked to Wedbush Morgan Securities Inc., an aggressively expanding downtown L.A. firm. A few months later, he joined as a managing director in Los Angeles.
“It’s exciting to help a firm like Wedbush build and strengthen its investment banking practice,” he said. “At some of the larger firms you have competing factions and everyone seems to have their own agenda. At a smaller firm, everyone seems to be pointed in the same direction.”
A year removed from the catastrophic upheaval in the markets that wiped out financial titans such as Bear Stearns and Lehman Bros., the dislocation of talent in the investment banking community still has yet to settle.
Indeed, a reshuffling of talent that began in earnest late last year has ramped up in recent months as the economy has shown signs of stabilizing. Many boutiques are now rushing to add talent while it is still available. Small and midsize investment banks headquartered in Los Angeles County added more than 100 local employees in 2009, according to an informal survey of just five by the Business Journal.
Among those bringing in new talent: Greif & Co., a boutique firm headquartered in downtown Los Angeles specializing in middle market mergers and acquisitions, is adding six people – a 50 percent increase in its work force ; Imperial Capital, a Century City firm, has already added 23 people; and B. Riley & Co., a West L.A. investment bank with about 60 employees, is bringing in 10.
“We’re hiring in all segments of our business,” said B. Riley Chairman Bryant Riley. “There is a lot of opportunity for hiring quality people.”
Mass layoffs
Since the financial crisis rocked Wall Street a year ago, the numbers of employees laid off from the largest firms have been staggering.
Citigroup Inc., Bank of America Corp., UBS AG, Credit Suisse Group AG and Goldman Sachs Group Inc. have shed more than 70,000 jobs combined. Lehman Bros. laid off 7,000 about the time it filed for bankruptcy last September. More than 7,600 people were out of a job practically overnight when Bear Stearns collapsed in March 2008.
“You had people at Bear Stearns who were incredibly successful at what they did and they were never going to leave,” said John Mack, managing director of Imperial Capital. “When their firm disappeared, all of those people were on the street; all of those people were made available. This is a once-in-a-lifetime opportunity.”
Indeed, many of the investment bankers would never have considered moving to a small firm if their hands had not been forced.
“I probably would have stayed if not for the upheaval. You get used to a certain platform,” said Schiamberg of Wedbush Morgan, who nevertheless said he found the switch refreshing. “It’s a bit like working at a young company.”
These days, though, Wedbush Morgan is looking less and less like a boutique. Over the past year, the firm has expanded from 700 employees to 1,000, largely because of a series of acquisitions it has made in the Southwestern United States since the economy turned south. But it also has picked up Wall Street talent where it could, including Jonathen Zauderer, who left Citigroup to join Wedbush Morgan in July.
Edward Wedbush, who helped found Wedbush Morgan in 1955, said he has been impressed by the marked increase in quality of the resumes landing on his desk these days.
“Many of them have very excellent educational levels, including Ph.D.s, M.D. degrees, M.B.A.s,” he said.
Flood of resumes
Prior to the market upheaval, Lloyd Greif, president of Greif & Co., said he would rarely have more than a couple of resumes on his desk at any time. Today, he has dozens, and they’re rolling in from across the country.
“There’s no question that this is probably the largest dislocation in financial talent that I’ve seen in my lifetime – and I’ve been doing this for nearly three decades,” he said.
One local firm, in fact, was born out of the turmoil. In 2007, as the financial markets were already in decline, investment banking star Ken Moelis left UBS to start Moelis & Co. To build the business, he brought in many of those he knew at UBS and his prevoius firm, Donaldson Lufkin & Jenrette.
Moelis & Co. has handled some high-profile deals in its brief existence, including the $26 billion acquisition of Hilton Hotels by Blackstone Group LP and the $60 billion purchase of Anheuser-Busch Cos. by InBev NV. Earlier this year, Moelis ranked as one of the 20 largest M&A firms in the country by market share, according to data from Bloomberg News.
The firm, which started the year with 144 employees, now has 230. The effort has included a number of notable additions, such as Stuart Goldstein, who left Citigroup to join Moelis’ Century City office in May as a managing director.
