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Raymond James expands specialty finance practice as 'war for talent' continues

Raymond James Financial Inc. is not done building out its financial services investment banking team.

The St. Petersburg, Fla.-based investment bank recently brought on J.P. Young as a managing director within its specialty finance banking practice. The hire came just weeks after the company agreed to acquire boutique investment bank Silver Lane Advisors LLC, which focuses specifically on the wealth and asset management space. When integrated, the combined firm will have roughly 50 investment bankers covering banks and thrifts, asset managers and insurance companies, among other institutions.

But as Raymond James continues expanding its financial services investment banking unit, it will have to take on some of Wall Street's biggest companies in a heated competition for qualified candidates.

"It's a war for talent, no doubt," said John Roddy, managing director and head of financial services at Raymond James, in an interview. "Even though we're fairly late cycle here, it doesn't feel like our industry is stepping back yet."

Within the next two to three years, the Raymond James executive believes the number of financial services investment bankers at the company could swell from "a little north of 50" to between 60 and 70 staff. The additional hires could come as Raymond James eyes further expansion in its insurance and depository practices.

Raymond James has made a number of hires in recent years to build out various parts of its financial institutions groups. The company tapped Jonathan Knauss as a specialty finance investment banker and Steven Egli as a depository investment banker in 2017. A year earlier, Roddy joined from Macquarie Group Ltd. In 2015, Raymond James hired a handful of former Sterne Agee & Leach Inc. investment bankers, which came four years after the company bought Howe Barnes Hoefer & Arnett Inc.

Raymond James' newest specialty finance investment banker, Young, comes to the company from William Blair & Co. LLC, where he worked as a managing director. Young, who joins a team of five other bankers, will focus on M&A deals ranging from $50 million to $500 million that involve consumer and commercial finance companies, as well as both equity and debt raises, all at a time when he says there is still considerable interest in the specialty finance sector.

"The market still continues to be strong for specialty finance companies," said Young, who is based in Chicago, during an interview. "There's a number of consumer and commercial finance companies out there that have really exciting platforms, and they're originating interesting products that are beneficial to both companies and consumers alike."

The work behind Raymond James' investment-banking business appears to have paid off too. The company generated $440.8 million in investment-banking revenues in 2018, which is the most that the unit has pulled in for the company in at least the last decade, according to S&P Global Market Intelligence data.

While specialty finance is not a new area for Raymond James, the investment bankers within the unit have increasingly worked with Raymond James investment bankers who cover private equity, financial technology and depository clients, according to Roddy. Private equity companies and banks have both targeted specialty lenders for potential deals, while nonbank lenders have also started to use newer technologies in their businesses, allowing for partnerships with fintech companies, he said.

"We certainly don't envision [specialty finance] as part of an island," Roddy said. "If it's going to reach its potential, it's going to reach it because J.P. and Jonathan Knauss, who's already a member of that team, will be working collaboratively with our banks team, with our sponsors team and with our financial technology team, among others."