New underwriting team joins in Los Angeles and Jersey City offices
First Empire Securities, a US fixed income broker-dealer for institutional investors, has hired the former Hapoalim Securities USA/Bank Hapoalim structured products team in a move to launch a certificates of deposits (CD) and structured note underwriting business.
The new team comprising Ardi Baniahmad, Josh Brenner, Rick Cabanes (pictured) and Meghan Greenwood is based at the firm's newly opened Los Angeles and New Jersey offices, and will be responsible for growing the underwriting capabilities at First Empire Securities as the firm builds out a syndicate and secondary trading platform, focusing on underwriting structured payoffs in certificate of deposit and corporate note form. The new team has also been charged with expanding and leveraging the company's digital product delivery platform.
At Hapoalim, the team created the Structured Product Trading Group, a dedicated desk servicing domestic and international issuers and creating products for private banks, broker-dealers, investment advisors and other institutions. Previously, the team was involved in similar lines of business at Countrywide Financial/Bank of America.
"Our history in the US structured products market goes back over a decade and the team has a successful track record of working with structured products in Countrywide/Bank of America and Bank Hapoalim," said Cabanes managing director at First Empire Securities. "The team will primarily underwrite debt instruments, whether it's a large deposit from a bank or structured note from an institution, and we can provide better financing for banks and compelling products for institutional clients by using structured and longer term instruments."
According to Cabanes, the team will capitalise on the experience in dealing with the world's largest banks and the smallest community banks, while adding value to the firm's depository client base via new and cost-effective funding solutions, as well as providing innovative products to its buy- side client base supporting issuances with "deep and meaningful" secondary markets. "We have one of the largest credit union coverage teams in the industry which provides all sorts of support services for credit unions such as asset liability management, regulatory advisory, and even asset management," said Cabanes. "As a broker dealer our initial focus will be in underwriting third party issues as First Empire Securities doesn't have a debt issuance vehicle but the access to small and mid-market issuers will provide us with an additional edge to be able to bring new products to the US market and go beyond what is currently offered to the street."
The expanded business will serve institutional clients but "part of our business has traditionally been focused on the retail channel as well; so, in a way it will be our former business 'plus'," according to Cabanes. "We have the capabilities and knowledge to bring value add to the market place, and the combination of the team's skills set and the firm's platform will put us in a good position to become an interesting player in the structured products market," Cabanes said.
First Empire Securities has a balance sheet to incorporate towards manufacturing product and has regulatory approval to deal with all asset classes and all product wrappers. "We also have the expertise in structuring any asset class and payoff - all the way out the curve, and we will build our offering on the back of those capabilities," said Cabanes. "First Empire Securities has given us flexibility and provided us with a balance sheet so that we can be highly relevant and issuers can swap those transactions for us to provide best execution and cheaper solutions."
The firm's digital channel will also be key for the new team to leverage its expertise around the development of new tools and functionalities while taking advantage on First Empire Securities' existing technology and systems to transact with its client base. "We will continue expanding those digital tools to streamline the way we communicate and transact with clients," said Cabanes.
Despite "significant headwinds in the market" whether around market variables or regulation, there will be opportunities for those players that have positioned themselves to take advantage of such situations, according to Cabanes. "We have the right people and a great platform to succeed, and we will invest in the business as it grows," said Cabanes.
Stephanie Rella, chief operating officer at First Empire said the new team is uniquely positioned to "help issuers optimize their funding needs", as well as "deliver compelling payoffs for clients looking for yield in this new era of depressed rates".
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