At CRT Capital Group L.L.C. in Stamford, the phones are already ringing after the broker-dealer captured $225 million in backing, in part to cherry pick talent from Wall Street.
Founded in 1989 as Credit Research & Trading and based in Stamford, CRT deals in credit, convertible debt, equities and emerging markets, while also adding desks in U.S. Treasuries and mortgage-backed securities. The company has 150 employees today, including CEO Ron Kripalani, who previously was CEO of the Countrywide Capital Markets division of Countrywide Financial Corp., before the company”™s fire sale to Bank of America Corp. following the credit crisis.
CRT is chaired by Ben Carpenter, the former co-CEO of RBS Greenwich Capital along with Jay Levine. Levine also is an investor in CRT.
Aquiline Capital is new investor
The company”™s new investment was led by Aquiline Capital Partners L.L.C., a New York City-based private equity company led by Jeff Greenberg, the son of former American International Group Inc. CEO Hank Greenberg.
Aquiline has been an active investor in Connecticut, in 2008 underwriting the startups of Tygris Commercial Finance, a financial company with a Wilton office that has since been acquired by EverBank; and Futurity First Insurance Group Inc., a life insurance distribution company based in Rocky Hill. Last year Aquiline acquired the Hartford-based insurance consultancy Conning & Co. from Swiss Reinsurance, which has its U.S. headquarters in Armonk, N.Y. Aquiline”™s CRT investment follows its own $476 million fund completed in July, which it is investing in financial services companies.
“CRT has leveraged its existing infrastructure to take advantage of the post-crisis dislocation and build its market share,” said Jeff Greenberg, CEO of Aquiline, in a prepared statement. “Ben and Ron”™s success in building industry leading brokerage platforms and the strength of CRT”™s client relationships will allow the firm to continue recruiting top talent while strategically growing its business.”
CRT becomes the second broker-dealer to receive a significant tranche of funding recently. Stamford-based Pierpont Securities L.L.C. took $220 million in backing last March from General Atlantic L.L.C. and Stone Point Capital L.L.C., both with offices in Greenwich.
Financial reform bill to impact small broker-dealers
More than 200 broker-dealers call Connecticut home that are members of the Financial Industry Regulatory Authority Inc. All are awaiting the fallout from regulations being crafted under U.S. Sen. Chris Dodd”™s financial reform bill, particularly small broker-dealers that could face stiffened regulations on disclosing conflicts of interest.
Between small firms suddenly facing added compliance expenses and large firms limiting their exposure to the most onerous regulations, middle market companies like CRT may have their best recruiting opportunity since the start of the last bull market.
The market is saturated with top talent leaving what CRT CEO Kripalani terms “constrained” brokerage platforms, in part the result of uncertainty due to regulatory reform; reduced capital dedicated to client trading activities; niche players unable to sustain their businesses in the face of capital deficiencies
Gearing up to hiring or acquisitions
For now, CRT is focused on hiring but Kripalani did not rule out making acquisitions if the right deal surfaces.
“I would say that we are opportunistic,” he said. “We are going to hire a lot of people from firms in New York (and) there are other firms in the Fairfield County area that we would possibly recruit from.”
The company plans to hire at least 40 people in the coming months, and Kripalani promises rapid growth after that, adding the company has sufficient space at its Harbor Drive headquarters to accommodate new employees.
“We see this firm growing exponentially,” he said. “We have been getting an extraordinary number of incoming phone calls (from jobseekers).”
