First Union to grow here

Equity-trading unit to be expanded into a major center

Banking

September 21, 1999|By Bill Atkinson | Bill Atkinson,SUN STAFF

First Union Corp., the nation's sixth-largest banking company, plans to build its equity-trading operations in Baltimore into a major center that could house as many as 150 employees by next summer, its top official in Maryland said yesterday.

J. William Knott, president of First Union National Bank/Maryland, said the company is hiring traders locally and that others are moving to First Union's 7 St. Paul St. tower from Wheat First Union's trading desk in Richmond, Va.

Knott said eventually all of First Union's trading operations in Richmond could move to Baltimore. "We are certainly moving the operations up here," he said. "There are a number of people who have been offered jobs to come up."

A spokeswoman for Wheat First Union in Richmond, however, said Richmond will continue to have a trading desk.

"There are a lot of moving parts right now. Nothing has been solidified," said Danielle Dietz, a spokeswoman for Wheat First Union.

"A few people have moved up [to Baltimore] there, but it has been isolated. I don't think there are any finite plans on what is going to happen." Knott also confirmed that First Union has hired Michael F. "Mickey" Misera, who headed Deutsche Banc Alex. Brown's trading operations in Baltimore. Misera, who took early retirement from Deutsche Banc Alex. Brown in June, has been named head of First Union's equity capital markets and will start Jan. 3.

"It is just another great acquisition that we were able to get," Knott said. "We have got some great people who came over [from Deutsche Banc Alex. Brown]. We are kind of building it around them."

First Union's trading desk in Baltimore is currently run by Christopher L. Holter and Christopher H. Bartlett II, both of whom left Deutsche Banc Alex. Brown in June.

"It looks like a formidable department," said Dennis A. Green, director of Nasdaq trading at Legg Mason Wood Walker Inc. in Baltimore.

"They are certainly going to have a big capital markets presence here. A lot of times you have to build where you have the right people."

First Union, which is based in Charlotte, N.C., has been on a mission to expand its "capital markets" unit.

The business specializes in taking companies public, mergers and acquisitions, and trading stocks for retail investors and institutional clients.

First Union acquired Wheat First Butcher Singer Inc. nearly two years ago, and in April, it signed a definitive agreement to buy Chicago-based EVEREN Capital Corp. for $1.1 billion.

"They have been working away at this for the last several years," said Lawrence Cohn, a banking analyst at Ryan, Beck & Co., a Livingston, N.J.-based brokerage firm.

"The equity capital markets side of the business has been a source of a tremendous amount of investment."

David West, a banking analyst at Davenport & Co., said First Union's capital markets operation has been "very successful."

He said he was "surprised" that First Union would open a trading unit in Baltimore after it already has one in Richmond.

"Clearly, that was driven by the recent hiring that they have done," he said. "They seem to be making a substantial bet that these are the people they want to lead the effort."

West said First Union could be trying to clone Alex. Brown's trading operations. Alex. Brown, which was one of the country's top niche investment banking firms, was acquired by Bankers Trust Corp. in September 1997. Bankers Trust and Alex. Brown were acquired by Deutsche Bank AG in November.

"It is certainly doable to replicate the Alex. Brown model," West said.

"Alex. Brown was very successful and very profitable."

Pub Date: 9/21/99

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