American investment banking firm
Keefe, Bruyette & Woods, Inc.
,
a Stifel Company
, is an
investment banking
firm headquartered in
New York City
, specializing exclusively in the financial services sector. KBW's primary business lines include
research
,
corporate finance
,
equity sales and trading
,
equity capital markets
,
debt capital markets
, and
asset management
.
The firm provides a broad range of services to corporate clients such as banking companies, insurance companies, real estate and
REITs
,
broker-dealers
, mortgage banks, asset management companies, and specialty finance firms as well as to the institutional investor community. KBW's research analysts cover more than 600 companies in the financial services industry globally.
The company, which was founded in 1962, currently has nine offices in the United States as well as an office in
London
. In 2013, KBW was acquired by
Stifel Financial
, a financial services holding Company, for $575 million.
[2]
KBW has advised on 65 percent of all bank M&A since 2017.
[3]
History
[
edit
]
The firm was founded in 1962 by Harry Keefe Jr., Gene Bruyette and Norbert Woods. The three founders previously had worked together at
Tucker, Anthony & R. L. Day
.
[4]
Beginning in the 1950s, Keefe had been one of the first Wall Street research analysts to focus on bank stocks, which later became the specialty of the firm he co-founded.
[4]
Norbert Woods died in 1972 and the firm was led by Keefe and Bruyette through the 1970s and 1980s.
[5]
Under Harry Keefe, the firm advised on several mergers that helped form large regional banks in the 1980s. The firm advised on a series of deals that created the
Bank of New England
out of smaller banks in Massachusetts and Connecticut. KBW also advised on the creation of
SunTrust Bank
from a group of Florida and Georgia based banks. In 1985, KBW negotiated the merger of
Wachovia
and
First National Bank of Atlanta
.
[6]
In 2005, the firm was sole adviser to
Bank of America
in its takeover of
MBNA
.
[7]
More recently, in 2019, KBW advised Chemical Financial on its $3.6 billion merger with TCF Financial
[8]
and Prosperity Bancshares on its $2.1 billion acquisition of LegacyTexas Financial Group.
[9]
Harry Keefe left the firm in 1989 after a business dispute with his associates and founded his own money management and consulting firm.
[4]
By 1990, KBW had transitioned management of the firm from the original founders to a new group including Charles Lott and James McDermott.
[10]
Gene Bruyette retired from the firm in 1991. James McDermott was later convicted of violating insider trading rules in 2000 by providing stock tips to a girlfriend.
[11]
John Duffy succeeded him and was named president and chief executive officer in September 2001.
[12]
In October 2011, Duffy was appointed Vice Chairman and Thomas Michaud was named president and chief executive officer of KBW. Michaud had been KBW's Vice Chairman and Chief Operating Officer since September 2001.
[13]
Impact of September 11, 2001
[
edit
]
The company's prior New York headquarters was located on the 88th and 89th floors of the
World Trade Center
's South tower at the time of the
terrorist attacks
of September 11, 2001. Out of the firm's 172 New York employees, 67 died as a result of the attack when the South tower collapsed.
[14]
Among the employees killed in the attack were the firm's co-CEO Joseph Berry, CFO Jeffrey Fox, as well as several notable research analysts Christopher W. Murphy, David Berry, Dean Eberling and Thomas Theurkauf.
[15]
The firm has held an annual 9/11 memorial service and also maintains a charitable fund it set up to help victims' families.
[15]
On July 25, 2018, the New York City medical examiner announced that the remains of another employee killed in the attack, 26-year-old Scott Michael Johnson, had been identified using methods of DNA analysis that were not available in 2001. Johnson worked as a securities analyst for the company.
[16]
European expansion
[
edit
]
Keefe, Bruyette & Woods Limited
|
Company type
| Subsidiary
|
---|
Industry
| Investment banking
|
---|
Founded
| 2004
|
---|
Defunct
| 2014
|
---|
Fate
| Liquidated
|
---|
Headquarters
| |
---|
Key people
| Vasco Moreno (CEO & Director of European Research)
|
---|
Revenue
| $30.3 million (2010)
|
---|
Total assets
| $10.6 million (2010)
|
---|
Number of employees
| 66 (2010)
|
---|
Parent
| Keefe, Bruyette & Woods
|
---|
In the late 1990s the firm began considering a move into
Europe
on the back of resurgent demand for specialist equity research and
brokerage houses
. The firm held abortive merger talks with London-based boutique investment bank
Fox-Pitt, Kelton
in 1998, and had been engaged in discussions with
BNP
about a possible acquisition in early 2001.
[15]
The strategic expansion was postponed in late 2001 as the firm dealt with the fallout from the
September 11 attacks
.
In November 2004, KBW announced it would be investing $20 million into Europe with the intention of replicating its North American success by offering specialist research on 110 European financial stocks by 2005.
[17]
The European subsidiary Keefe, Bruyette & Woods Limited was incorporated in London and by December 2004 the team had grown to 34.
[18]
Vasco Moreno was named as
chief executive officer
and director of European research, moving from rival European boutique
Fox, Pitt Kelton
.
[13]
KBW made 13 other senior hires from Fox-Pitt, including Richard Wynn-Griffith as Director of Equity Sales.
[19]
[20]
The move was a financial success, with the European business raising the firm's profile and generating $20 million in revenue as early as 2005.
[18]
The firm also secured membership at the
Euronext
,
London Stock Exchange
,
Deutsche Borse
and
SIX
stock exchanges, a move which consolidated KBW's position as a specialist broker.
[21]
In 2014, the European subsidiary was absorbed by
Stifel Financial
's London business after the merger between the two parent companies. Moreno resigned in October 2013.
[18]
Initial Public Offering
[
edit
]
In 2005, KBW was the eighth largest trader of
NASDAQ 100
financial stocks?greater than
Goldman Sachs
and
Bear Stearns
, despite having only 430 employees.
[22]
For 2004 and 2005 the firm's
investment bank
was the No.1 ranked financial services
M&A
advisor and
IPO
manager globally, having advised on deals totalling $39 billion in 2005. The firm also ranked No.1 in five of their seven specialist research categories in a survey by
Institutional Investor
in December 2005.
[23]
On the back of this success, KBW completed a $143 million
initial public offering
of stock, floating 6.8 million shares on 9 November 2006.
[24]
The firm was traded on the
NYSE
under the ticker 'KBW'.
[25]
The joint bookrunners for the initial public offering were Keefe, Bruyette & Woods, Inc. and
Merrill Lynch
. As of the end of 2010, KBW employees owned approximately one-third of the stock in the firm.
[26]
Asian expansion
[
edit
]
Following the success of the firm's foray into Europe in 2004, KBW announced in May 2010 it would be opening offices in
Hong Kong
and
Tokyo
offering
research
,
sales & trading
, and
capital markets
advisory to institutional clients in the
Asia-Pacific
region. The new
equity research
business targeted an additional 91 Asian
financial services
companies, making KBW's global research platform of 600 companies in 33 countries the largest specialist financial services research franchise.
[27]
Bik San Leung was named as
chief operating officer
for KBW's Asian franchise, supervising 16 initial hires in
Hong Kong
and 4 in
Tokyo
.
[28]
As in
Europe
, much of the firm's senior staff had been hired from
Fox-Pitt, Kelton
's Asian business.
[29]
Thomas Michaud and Vasco Moreno were also appointed as
Non-Executive Directors
to oversee the development of the franchise.
[28]
On 5 November 2012,
Stifel Financial
announced they would be acquiring KBW in its entirety for $575 million. KBW was the third bank to merge with Stifel since 2010 as part of Stifel's efforts to become the pre-eminent middle-market
investment bank
. The merger was completed on 15 February 2013. Keefe, Bruyette & Woods retained its own identity as a specialist in financial services operating under the Stifel umbrella, and Thomas Michaud retained his role as
chief executive officer
of KBW and was made a member of Stifel’s Institutional Group Management Committee.
Business overview
[
edit
]
The firm now operates under the Stifel umbrella as a
financial services
specialist, providing the following services to its clients:
Investment banking
[
edit
]
KBW provides strategic advisory to
private equity
groups and corporations offering debt, equity & convertible capital raising,
mergers & acquisitions
and restructuring services.
[30]
Sales and trading
[
edit
]
KBW offers equity and
fixed income
sales & trading services to institutional clients. The firm levers Stifel's technology to provide acquisition integration, balance sheet advisory, investment portfolio analysis and reporting as well as product-specific strategies designed to improve overall performance.
[31]
Research
[
edit
]
Together with Stifel, KBW's Equity Research division is the industry's largest provider of small and mid-cap
equity research
. The firms cover 1,600 global companies in 12 sectors and remain the provider with the broadest global financial coverage. The firm also provides
macroeconomic
research on the global financial services sector,
FinTech
and has a
quantitative analysis
group.
[32]
Public finance
[
edit
]
KBW helps state and local government agencies raise capital and implement financing strategies that allow them to build and maintain infrastructure for the communities they serve.
[33]
Equity capital markets
[
edit
]
Together with Stifel, the firm's Equity Capital Markets group is responsible for the origination, underwriting, marketing, allocation and pricing of equity and equity-linked offerings across all sectors. KBW has been ranked the No.1
bookrunner
of financial services common
stock offerings
since 2015, with a 71% market share since 2018.
[34]
See also
[
edit
]
References
[
edit
]
- ^
2010 KBW Annual Report
- ^
Company Overview on Businessweek
- ^
"Regional banks ready to join forces to battle JP Morgan in anticipated merger wave"
.
CNBC
. 23 March 2019.
- ^
a
b
c
Harry Keefe Jr., 79, Innovator In Investments in Bank Stocks
. New York Times, March 14, 2002
- ^
Keefe Takes on the Big Leagues
. Euromoney, June 1986.
- ^
Keefe, a Pioneer Dealmaker, Still Going Strong at Age 70. American Banker, December 14, 1992
- ^
Atlas, Riva D. (8 July 2005).
"Honing Its Image as a Little Investment Bank That Can"
.
The New York Times
.
- ^
Prang, Allison (28 January 2019).
"TCF Financial, Chemical Deal Shows Impact of 2018 Bank Law"
.
The Wall Street Journal
.
- ^
"U.S. Regional bank Prosperity to buy peer LegacyTexas for $2.1 billion"
.
Reuters
. 17 June 2019.
- ^
Keefe Bruyette & Woods Chooses a President
. New York Times, October 04, 1990
- ^
Apologizes to his family
. New York Daily News, August 04, 2000
- ^
"Keefe, Bruyette & Woods, Inc. : About KBW : Senior Management Bios"
. 2011-11-03. Archived from
the original
on 2011-11-03
. Retrieved
2021-02-02
.
- ^
a
b
"Keefe, Bruyette & Woods | The Firm ? Leadership Team"
. 2012-08-23. Archived from
the original
on 2012-08-23
. Retrieved
2021-02-02
.
- ^
sep11:Keefe, Bruyette and Woods, Inc.
for a list of September 11 victims.
- ^
a
b
c
A Battered Firm's Long Road Back
. Wall Street Journal, September 6, 2011
- ^
- ^
Wighton, David (November 14, 2004).
"KBW plots its European entry"
.
www.ft.com
. Retrieved
2021-02-02
.
- ^
a
b
c
"KEEFE, BRUYETTE & WOODS LIMITED"
.
find-and-update.company-information.service.gov.uk
. Retrieved
2021-02-02
.
- ^
"Fox-Pitt, Kelton hit by more resignations"
.
eFinancialCareers
. 2004-04-18
. Retrieved
2021-02-02
.
- ^
Croma.edu.uy.
"KBW | Richard Wynne-Griffith"
.
KBW
. Retrieved
2021-02-02
.
- ^
"Keefe opens London shop"
.
Institutional Investor
. 13 December 2004
. Retrieved
2021-02-02
.
- ^
"KBW: Five years after Sept. 11 ? Sep. 8, 2006"
.
money.cnn.com
. Retrieved
2021-02-02
.
- ^
"KBW, Inc. INITIAL IPO PROSPECTUS"
.
www.sec.gov
. Retrieved
2021-02-02
.
- ^
MarketWatch, Steve Gelsi.
"Keefe, Bruyette & Woods IPO jumps 28%"
.
MarketWatch
. Retrieved
2021-02-02
.
- ^
IPO of KBW
- ^
"KBW, Inc. Annual Report 2010"
.
media.corporate-ir.net
. Retrieved
2021-02-02
.
- ^
"KBW unveils Asian expansion"
.
www.ft.com
. Retrieved
2021-02-02
.
- ^
a
b
"Jump-starting an Asian business"
.
www.theasset.com
. Retrieved
2021-02-02
.
- ^
Flaherty, Michael (2009-10-15).
"UPDATE 2-Fox-Pitt to close in Asia after Macquarie deal"
.
Reuters
. Retrieved
2021-02-02
.
- ^
Croma.edu.uy.
"KBW | Investment Banking Capabilities"
.
KBW
. Retrieved
2021-02-02
.
- ^
Croma.edu.uy.
"KBW | Equities Capabilities"
.
KBW
. Retrieved
2021-02-02
.
- ^
Croma.edu.uy.
"KBW | Research Capabilities"
.
KBW
. Retrieved
2021-02-02
.
- ^
Croma.edu.uy.
"KBW | Stifel Capabilities"
.
KBW
. Retrieved
2021-02-02
.
- ^
Croma.edu.uy.
"KBW | Capital Market Capabilities"
.
KBW
. Retrieved
2021-02-02
.
External links
[
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]