Thom Weisel is back. And it looks like some of his former
troops are joining him.
Weisel, who built Montgomery into one of the nation's top specialty investment banks, is recruiting to staff his new firm after abruptly resigning in September from Montgomery. He quit after a power struggle with Hugh McColl, who runs Montgomery parent
, which was formed by
acquisition this year of
Weisel's targeting of Montgomery employees comes at the same time that BankAmerica is losing executives -- 14 of 45 officers at the old BankAmerica, according to
The Wall Street Journal
-- in a continuing battle between NationsBank and BankAmerica workers.
Trading-desk chatter from New York to San Francisco has Weisel, who apparently left Montgomery without any onerous noncompete or nonsolicitation agreements, seeking traders, sales pros, bankers and analysts.
"He's in a hiring mode," says one New York trader who requested anonymity.
Weisel was traveling Wednesday and could not be reached for comment.
These developments have Montgomery professionals eyeing each other in the hallways, wondering who may next join their former general. Weisel, according to people in the San Francisco finance community, brought in Montgomery's former chief tech banker Sanford (Sandy) Miller early on and, in the past two weeks, has added a handful of traders and sales pros to his new shop. His pursuit of trading talent has many observers expecting him to launch a boutique investment bank, trading house and venture-capital operation in the Montgomery mold. Miller couldn't be reached for comment.
"I'm hearing he's very close to hiring someone senior to run the trading operation," says one prominent New York trader. Speculation in that vein has focused on another former Montgomery executive, Jerome Markowitz, who left the firm the day after Weisel. Another high-profile candidate is former
Salomon Smith Barney
block trader Tim Heekin, who left that firm, a unit of
, in October. Markowitz and Heekin couldn't be reached for comment.
Another name surfacing is Jay Jacobs, formerly with
in Minneapolis, who one analyst close to Montgomery says is slated to head Weisel's institutional sales desk. Jacobs couldn't be reached for comment.
Montgomery, which handed out bonuses Dec. 18, has been anticipating the emergence of Weisel's firm since his departure. Among some of those who have left and are believed to be headed for Weisel's new shop are trader Peter Stovell and institutional-sales pro Rich Gimigliano, both of whom left Monty in the past two weeks. Stovell and Gimigliano couldn't be reached for comment. A Montgomery spokeswoman confirmed the pair left the firm.
West Coast traders say about five other less-senior Monty traders and sales people also have signed on.
If BankAmerica is worried, one top player isn't letting on. "Everyone has end-of-the-year jumpiness -- ours is higher because Thom is setting up his own firm," says Carter McClelland, who heads BankAmerica's investment banking. "I don't think anything abnormal is going on, but I could be wrong in two weeks."
McClelland says since Weisel left the firm, there have been about 20 departures from the Montgomery side of the business but few rainmakers among them.
Still, BankAmerica isn't taking chances with its talent. It has admitted 12 more professionals to its partnership ranks, which now number about 65, and already is discussing 1999 compensation with some of its key players, he says. McClelland, however, says the moves are not directly in response to the emergence of Weisel's firm.
"It's more in response to what we're going to become in 1999, and to make them comfortable with it," he says.
What that firm will be in 1999, he says, is one that has a much broader financial role than the emerging-growth sector where Weisel's Montgomery prospered. "What grew up out of Montgomery was a high-quality firm that was quite good at emerging-growth business," he adds. "We're not abandoning that business, but we're building on top of it."
With BankAmerica's expanded capital base and product lines, the firm may be headed to a bulge-bracket showdown with more traditional powers.
Around the Bay Area, everyone in the investment community seems to be watching and waiting for details of Weisel's new shop. The big question is which investment services Weisel will offer, the assumption being that there is only room these days for niche players.
Edward Leonard, a managing director of
, a Silicon Valley investment bank that specializes in corporate mergers, says Weisel originally was going to concentrate on stock trading, but the venture now seems to be turning into a hybrid bank that combines trading and underwriting.
Last year's wave of bank-brokerage mergers has made the competition more difficult for smaller firms. These days, it takes an enormous amount of capital to succeed as an underwriter, and Leonard is doubtful a small player can elbow its way in, even one with Weisel's cache.
But "if he can hire the right people,
Weisel will be tough competition," he says. "But his reputation by its itself won't do anything."
Kent Copa, a portfolio manager with the $5 billion
Fremont Investment Advisors
in San Francisco, says there's little room for a new firm that hopes to concentrate on equities trading. "There are a lot of choices out there already," Copa says. "With all the mergers and cost-cutting the large firms are doing, it will get tougher all the time."
Being tough has never been a problem for Weisel, according to people who know him. He built a scrappy Montgomery into one of the preeminent specialized investment banks in the country and capitalized on the bull market of the '90s to sell the firm to NationsBank for $1.2 billion.
Weisel apparently feels good about his prospects. San Francisco real-estate sources said he managed to sign an eight-year lease for the top three floors of the former headquarters of
at 1 Montgomery St. That's just down the block from his old digs in the
. One commercial real-estate broker said such space in San Francisco is going for $50 per square foot, or $2.4 million a year for the 48,000 square feet of space. And that will give him enough room for about 200 people, the real-estate broker says.
Senior Writer Dan Colarusso contributed to this article.
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