Best-In-Class Minority BrokerDealer Profile: Mischler Financial Group

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Brokerdealer.com blog is pleased to profile Mischler Financial Group, the financial industry’s oldest and largest minority brokerdealer/investment bank owned and operated by Service-Disabled military veterans. Now celebrating its 20th anniversary, the firm’s founder and Chairman Walt Mischler is a West Point graduate who served 2 tours of duty in Vietnam prior to being injured in the line of duty. CEO Dean Chamberlain, also a West Point grad, and also certified as a disabled veteran consequent to injuries he sustained during a helicopter training mission, is widely-recognized across the debt capital markets space, much in part due to his prior role as Head of Fixed Income/Americas for global investment bank Nomura Securities.

Mischler is the securities industry’s only federally-certified BD and maintains a significant footprint across both primary debt and equities capital markets where the firm serves as a underwriter, manager, co-manager and/or selling group member for corporate issuers bringing new debt or equities to the investment marketplace. The firm is also one of few in the industry that operates a 24/6 “high touch + high tech” trading desk that facilitates agency-only, direct market access and best execution for institutional clients transacting in US domestic markets and 100+ international equities markets. The firm’s website is located at www.mischlerfinancial.com

BrokerDealer Fantex Completes IPO for NFL Star EJ Manuel

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Buffalo Bills Star E.J.Manuel

Buffalo Bills Star E.J.Manuel

Sports-centric brokerdealer Fantex announced it raised enough capital to close 523,700 shares of Buffalo Bills quarterback EJ Manuel and shares of his convertible tracking stock. The IPO required help from the company which stepped up to buy 250,000 shares, or 48 percent of its own shares of the total offered amount.

Trading under the Fantex ticker EJMLL, the stock began trading last week at Fantex.com. This is the second successful athlete IPO that Fantex has been able to close. CEO Buck French voiced his excitement on the success of the program and future plans to build E.J. Manuel’s NFL Brand.

Fantex, a sports marketing stock exchange, allows traders to capture a share of contracted athletes’ career earnings potential. On its exchange, Fantex offered 523,700 shares of stock at $10 per share on Manuel. In return, Fantex will pay Manuel almost $5 million up front to receive 10% of his future earnings tied to his “brand.” These future earnings include any NFL contracts, marketing endorsements, post-career broadcasting contracts, and any other checks he’ll cash through his NFL “brand.”

A full exploration of the firm’s operations, business model and potential risks to investors is the subject of a feature story in the print debut of The Alpha Pages

Top BrokerDealer’s Babble Takes on Bloomberg Chat

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babbleGoldman Sachs, the brokerdealer world’s most iconic investment bank is developing its own instant messaging service that could be used as an alternative to Instant Bloomberg, the chat tool contained in Bloomberg terminals. The project, nicknamed “Babble,” appears the brainchild of Goldman Sachs but won’t be exclusive to just one bank, according to CNBC. Rivals including J.P. Morgan are also said to be involved.

Banks have plenty of reason to run their own instant messaging services. First, there is the relationship with Bloomberg, which was forced to apologize after granting reporters access to client information stored in Bloomberg terminals. But CNBC says that the main reason for the move isn’t a lack of trust between the two firms or any particular security concerns. Rather, it’s a money and an integration issue. Bloomberg terminal leases cost upwards of $20,000. Plus, Babble is being designed so that it can be integrated with other tools that banks and clients can share, according to the report.

“It will be interesting to see how much a fully-functioning chat alternative would affect Bloomberg. As of last year, Bloomberg’s flagship terminal business accounted for 85% of the company’s revenue, though the firm is actively trying to diversify its business. Still, chat functionality isn’t the only use for the terminals, obviously. Wall Street has been trying to wean themselves off Bloomberg terminals for a while now. Would a chat replacement really be a deathblow? Unlikely. But who knows – maybe it will give banks a bit more leverage in negotiations.”

Fidelity Investments Partners With BrokerDealer Credit Suisse for IPO Deal Flow

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Fidelity Investments and investment banker/brokerdealer Credit Suisse have formed a partnership that gives Fidelity’s retail brokerage clients access to participate in initial public offerings and follow-on equity offering underwritten by Credit Suisse. The partnership opens up IPO investing for customers of Fidelity’s registered investment advisor (RIA) network, its family office clients and its retail brokerage customers who qualify.

For Credit Suisse, the arrangement opens up its potential investor base to a wide arena of new customers. “It gives us the ability to distribute shares into the mass market that we didn’t have before,” David Hermer, Credit Suisse’s head of equity capital markets for the Americas, told New York Times DealBook.

About 232 companies have gone public so far this year, nearly 79 percent more compared with those in the period a year earlier, according to data from Renaissance Capital. By Mr. Hermer’s reckoning, the I.P.O. surge is still only in its early stages.

Credit Suisse completed 63 book-run IPOs in the first half of 2014, its most active half-year period on record. For that period, Credit Suisse ranks number two for IPOs in the U.S. and in the EMEA area–Europe, the Middle East and Africa. Looking ahead, Credit Suisse is working on several high-profile deals, including the much-anticipated IPO for Chinese internet company Alibaba.

And, the thinking goes, the more companies that Credit Suisse helps take public, the more that Fidelity customers benefit. The IPO participation is open to Fidelity investors with a minimum of $500,000 in retail assets.

Accredited Investor Rule Subject To Change Thanks to Crowdfunding and JOBS Act

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Brokerdealer.com blog update courtesy of extract from FINalternatives.com

FINALTERNATIVESThe Securities and Exchange Commission is considering changes to its 30-year-old definition of “accredited investor” that could have serious implications for the crowdfunding industry.

Accredited investors are permitted to participate in private securities placements, and since the passage of the JOBS Act in 2012 opened the door to general solicitation for investors, many have been finding those opportunities through crowdfunding platforms.

The current definition of an accredited investor, written in 1982, says it is a person with earned income in excess of $200,000 (or $300,000 with a spouse) in each of the prior two years or one with a net worth over $1 million (alone or with a spouse), excluding the value of his/her primary residence.

Those pushing for change say the income thresholds have not been updated for inflation—that in today’s dollars, $200,000 and $300,000 would be $500,000 and $700,000.

But critics, like Brendan Ross, president of Direct Lending Investments, say such a change would halve the number of accredited households in the U.S., which today make up, by the SEC’s own calculations, 7.4% of all households.

Ross, who manages a short-term, high-yield small business loan fund, told FINalternatives that as regulators “become more educated on the implications of such a change, they will be less likely to move forward.”

“This would negatively impact the investment management industry as the number of accredited investors would sharply decrease. It’s unlikely that the SEC would want to impinge upon the private placement industry, which is the source of most financial innovation. Value investing, small companies, emerging markets, commodity funds, and REITs all started with accredited investors putting money into private placement vehicles, which then evolved into mutual funds.”

 

For the full story, please visit www.finalternatives.com