Alex. Brown refugees here face shake-up at Wachovia

February 11, 2005|By Bill Atkinson

ABOUT FIVE years ago a band of Alex. Brown refugees walked a couple of blocks west and found work at what today is called Wachovia Securities.

They were escaping Deutsche Bank AG, the German company that was slowly dismembering Alex. Brown and moving jobs to New York. Recognizing the talent pool here as rich and deep, Wachovia called Baltimore its headquarters for its fledgling Equity Capital Markets division.

Today, Wachovia Securities employs 200 people at its 7 Saint Paul St. operations. But employees could be reliving Deutsche Bank all over again: Wachovia plans to soon merge the Baltimore division with a division in New York that specializes in issuing convertible stocks and bonds. The new headquarters won't be in Baltimore.

It is unclear how many people will be forced to move or lose their jobs.

"In the short run, we expect there to be fewer jobs in our Baltimore office ... ," said Ben Williams, who heads Wachovia's Global Capital Markets in Charlotte, N.C. "Exactly how many less jobs in Baltimore ... we are still working through that."

Wachovia Corp., the nation's fourth-largest banking company, has ambitions to vault into the top ranks of Wall Street equity underwriters. And to do that, Williams said, Wachovia has to focus on New York.

The company already has space at 375 Park Ave. Revenue in the company's capital markets business has been growing at a 25 percent annual clip over the past five years, but to keep up the pace and to become a top player, Wachovia needs New York talent, Williams said. Clients want more sophisticated financial products, he said, and competition is stiff.

"What used to work for us in the past will no longer work for us going forward," Williams said. "We are doing this because we want to grow this business. We need to ... deepen our presence in New York to attract the world's largest talent pool."

What's clear is that Baltimore will again become a satellite office, a place, more likely than not, where big decisions won't be made.

Williams insists that Baltimore won't be abandoned. (The merger does not affect Wachovia's banking operations in Baltimore, which employ 1,400 people.)

"Our overall commitment at Wachovia to Baltimore and the Baltimore area remains incredibly strong," said Williams, who referred to it as one of the company's best markets. "We remain deeply committed."

Of course, Baltimore has heard this before from out-of-town executives. Rolf-E. Breuer, who headed Deutsche Bank, said in June 1999, "I think Alex. Brown is here to stay."

Wachovia's Equity Capital Markets division here, which was started from scratch in 1999, has been run by Mickey Misera, who built Alex. Brown's trading desk.

In 2000, he joined Wachovia, then known as First Union, and brought a raft of Alex. Brown employees with him.

His division oversees stock trading for large institutions, marketing services to big money managers and hedge funds, plus underwriting initial and secondary offerings. These employees are some of the highest-paid in the company.

The top job moves to New York, too. Misera is no shoo-in for the slot; he will have to compete with candidates inside and outside the company.

Misera, who lives in Cockeysville, said this week that he has not yet applied since the job was not posted.

The head of the division will be named next month.

The mood among employees is "realistic," Misera said. "Everyone embraces the idea that it is about growing our business. ... Any decisions being made are truly respected."

But the mood has been "somber," said a trader who works for a competitor but has friends inside Wachovia.

"A lot of employees have just become numb to the changes," the person said.

Names are being floated for a successor to the Securities and Exchange Commission's top mutual fund cop, Paul F. Roye, who is expected to leave the agency this year.

Roye and Eliot Spitzer, New York's attorney general, have led the crackdown on the mutual fund industry.

One name that has gotten some play is Henry H. Hopkins, 62, chief legal officer of T. Rowe Price Group Inc., which has avoided the regulatory misfortunes of other fund companies.

Hopkins, through a spokesman, said there is nothing to the rumor.

He also said he never seriously considered Roye's job.

Others think he would be an ideal choice.

"He comes with really great, clean hands," said Mark K. Joseph, chairman of MMA Financial in Baltimore and a friend of Hopkins.

"I would guess it is hard to find somebody who has the kind of experience he has and comes from a company that has got such a remarkable record."

Bill Atkinson's column runs Tuesdays and Fridays. Contact him at (410) 332-6961 or by e-mail at

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