The Business Journal spotlights local investment bankers who are capitalizing on Wall Street’s chaos.
Gary Wedbush is on a hiring spree.
In the last two years, he has doubled the size of the investment bank his father founded, so that it now has a staff of 50 bankers. The bank also has expanded in the related niche of equity research, with 36 analysts in Los Angeles and San Francisco covering nearly 400 companies. The firm boasts the largest cadre of research professionals on the West Coast.
Wedbush sees a direct correlation between the investment bank’s recent growth and the collapse of the major Wall Street financial conglomerates.
“During these rough times, the big companies have pared back or gone out of business and that has created a great pool of talent,” he said. “Also, some of the small boutique firms ran into issues so there were opportunities to acquire.”
In January 2009, Wedbush purchased Pacific Growth Equities in San Francisco, a tiny brokerage focused on life science. Wedbush previously had no expertise in biotech, but the acquisition has proved prescient. As the economy has recovered, nearly all of Wedbush’s investment banking projects have come thanks to Pacific Growth’s connections.
The most high-profile deal was the initial public offering for Ironwood Pharmaceuticals on Feb. 2. It raised $188 million, making it the largest biotech IPO since 2002. Other deals include a $66 million stock issue for Savient Pharmaceuticals, a $36 million offering for Delcath Systems and a $15 million private equity placement for Nexxus Lighting.
The securities firm is a wholly owned subsidiary of Wedbush Inc., the minifinancial conglomerate founded by Ed Wedbush in 1955. Ed Wedbush remains chairman of the parent company, which also includes a commercial bank and private equity fund.
The son holds an economic degree from UCLA and an M.B.A. from the Kellogg School at Northwestern University in Evanston, Ill. He worked for 12 years, including stints at Lehman Bros. in New York and Montgomery Securities in San Francisco, before returning to the family business in 1998.
Wedbush decided to work for his father to develop the capital market groups. He grew the operation gradually until 2008, when conditions favored a rapid expansion.
“If a top banker leaves a big bank, he might take the business with him,” Wedbush explained. “For years, midsized firms couldn’t hire those kinds of bankers, but with this downturn they became available for the first time in my career.”
In total, Wedbush Morgan Securities has about 1,000 employees nationwide. The company maintains a large staff of retail brokers and operates a correspondent clearing service that processes many trades for online brokerages.
GARY WEDBUSH, 45
Executive Vice President, head of Capital Markets Group
Wedbush Morgan Securities Inc., Downtown Los Angeles
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