People think there’s not a lot of investment banking in Los Angeles because the county lacks Fortune 500 companies and the titans of Wall Street.
But Los Angeles, in fact, is home to a surprising number of firms that handle the deals of the business world, including mergers and acquisitions, equity offerings and recapitalizations. The local players range from established institutions to specialty boutiques and startups.
That’s the view of Alexander L. Cappello, founder and managing director of Cappello Capital Corp. in Santa Monica, No. 6 on the Business Journal’s first list of investment banks. (See page 21.)
And because of the nature of the L.A. investment banking world, it’s a more stable environment.
“The big firms come and go with recessions,” he said. “With the boutiques, we’ve all been in the community for a long time and we’re not going anywhere. We’re not looking to do a build-and-flip sort of thing.”
Mike Rosenberg, chief executive of Intrepid Investment Bankers LLC in Los Angeles, agrees.
“Los Angeles doesn’t get credit for how robust a deal market there is here,” he said. “But it’s quite significant.”
Cappello’s company has 21 licensed brokers and 39 total employees, with headquarters on the 12th floor of a building with a view of the Santa Monica Bay.
The list starts with No. 1 Houlihan Lokey in Century City, with 110 licensed brokers and 243 total employees as well as a new office in Newport Beach, and finishes with No. 25 William & Henry Associates, a boutique firm in Century City with five brokers.
Cappello, 57, started his firm nearly four decades ago. He now has 10 offices, including posts in Seoul, South Korea, and Taipei, China – the firm’s international character is illustrated with antique globes and foreign flags that decorate its L.A. headquarters. The company specializes in cross-border deals, such as Seoul food company Pulmuone Holdings Co. Ltd.’s acquisition of Salinas firm Monterey Gourmet Foods Inc. for $46 million in 2009.
Many of the company’s deals are private. Cappello did $5 billion in transactions last year, compared with about $4 billion the previous year. Both years counted 28 deals, including M&As and recapitalizations. In December 2012, for example, the company helped with a debt recapitalization by Smart Start Inc. in Irving, Texas, which sells alcohol monitoring technology such as breathalyzers.
Activity appears to be on upswing after the recession years.
“Some of it is pent-up demand that was waiting over the past few years and has decided it is safe to get back into the water,” he said.
For reprint and licensing requests for this article, CLICK HERE.