Bank of America
continues hiring in and lending aggressively out of its investment banking unit, taking advantage of cautiousness on the part of its competitors to gain market share and snap up some talented executives.
Sources say BofA's latest hire is Chris Hogg, a longtime
executive who was in charge of the Wall Street firm's unit that helps its financial institutions clients raise money.
Though BofA CEO Ken Lewis
that he had "had all the fun
he could stand in investment banking," he has lately been making more positive statements about that business, which accounted for $9.1 billion, or 24%, of the bank's $37.3 billion in second quarter revenues.
Recent hiring activity and the results
continue to show that the Charlotte-based institution is a long way from ceding its share of the fees U.S. companies pay to Wall Street.
Sources say Hogg will be a BofA managing director and join Ken McPhail in co-heading Depository Institutions and Government Agencies. He will report to Phil Barnett, head of Financial Institutions.
A Goldman spokesman confirmed Hogg left the firm, but declined further comment. Hogg is not yet listed in BofA's switchboard directory and did not return calls to his home. A BofA spokeswoman had no immediate comment on whether Hogg would be joining the bank.
In a 1997 profile,
credited Hogg with developing monthly income preferred securities (MIPS). Though the preferred equity hybrid securities were extremely popular at the time as a way for companies to raise equity while avoiding taxes, their adherents included the now-notorious
, and a 2003
article cites unnamed accounting experts who say that MIPS "contributed in part to the distorted earnings mess of the late 1990's."
Still, Hogg has some admirers in high places, among them
Sullivan & Cromwell
partner Rodgin Cohen, one of the most powerful private sector attorneys focused on the banking industry. "You deal with a lot of smart people in this business, but Chris is really one of the smartest guys I know," Cohen says.
in 1997 announced that they had hired Hogg, only to watch Goldman woo him back that same month.
Since the credit crisis hit, Goldman
in helping financial institutions raise equity and equity-like capital. Notable advisory assignments include the $7 billion dollar investments in both
. Though it is officially charged with raising debt, the group formerly led by Hogg has been in the thick of that activity.
Hogg is only the latest in a string of high-profile hires by BofA. The bank has snapped up several senior bankers from
over the last two months or so. Among these is Phil Barnett, a Morgan Stanley veteran who will oversee the group of investment bankers charged with forging relationships with financial institutions clients. The hires of Barnett and Hogg indicate BofA is overhauling this unit, which has also seen some senior departures in recent months.
In addition to the hiring, BofA is being unusually aggressive, compared to its rivals, in lending to highly leveraged companies and in underwriting mortgage securities. The bank has more than doubled its market share in underwriting junk bonds, convertible debt, asset-backed securities and mortgage-backed securities compared to where it was in the previous two years, according to data from Thomson Reuters. It has also grabbed 21.5% of the leveraged loan underwriting business in the first half of the year, compared to a 14.2% market share in 2007.
A BofA spokeswoman declined to make anyone available to discuss the bank's lending and underwriting strategy. But Lewis, on the second-quarter conference call, noted that BofA's investment bank was "very active in the quarter." It produced fees of $765 million, which Lewis said reflected "increased market share and good results in debt underwriting."
Lewis also noted that "debt issuance had record market volumes in April and May led by high yield which was almost 13 times the volume in the first quarter."