They raise the billions of dollars needed to build schools, repair bridges and improve the infrastructure of cities from San Francisco to Atlanta. Their deal-making drives the mergers, acquisitions, expansions and divestitures that define the evolution of international business.
They are the "25 Hottest Blacks on Wall Street," a compilation of the best and brightest investment bankers, traders and analysts in America. Responsible for deals and transactions for hundreds of millions and even billions of dollars here and abroad, these men and women are at the top of their profession.
Although BLACK ENTERPRISE has covered African-Americans on Wall Street for more than 20 years, this is the first time the publication has developed a list of this nature. Of course, not all the individuals listed actually work on Wall Street. These money mavens can be found in cities across the country: Atlanta, Chicago, Philadelphia and San Francisco.
The good news: Finding these bankers and traders wasn't as difficult as one might think. African-Americans can be found at the highest levels of responsibility at several of the nation's most prestigious Wall Street firms. And black finance professionals have also built impressive track records with their own investment firms.
The bad news: African-Americans at the nation's leading investment banks remain few in number, especially black women. There also is little indication that there are enough black finance professionals coming through the pipeline to improve the statistics. AfricanAmericans are a small percentage of the financial services industry. In 1991, the Bureau of Labor Statistics reported there were 1.6 million people working in the industry. Five percent, or 77,000, were black. Surprisingly, 8.6% of the 766,000 financial managers, underwriters and other financial officers in the industry were black.
All the bankers interviewed were extremely concerned about the lack of AfricanAmericans in the industry. That's why most of the individuals, like William Lewis at Morgan Stanley, are aggressively pushing their companies to seriously implement programs designed specifically to recruit and hire talented and highly qualified black MBAs and lawyers. "This is not an industry that is traditionally known in the African-American community," says William Hayden, senior managing director at Bear, Stearns & Co. Inc. and former chairman of the National Association of Securities Professionals (NASP). "We didn't have brothers, sisters, mothers and fathers who worked for these firms like many of our peers. And because investment bankers tend not to get a lot of publicity, African-Americans in this industry need to reach out to the community."
Change also will be required of Wall Street itself. For far too long it has been a club stooped in exclusivity. Needless to say, seeking out qualified African-Americans for membership has never been a priority of chief executives of the major investment banks. However, there have been encouraging signs. For example, Morgan Stanley has contracted with James H, Lowery & Associates, a Chicago-based consulting firm, to set up and implement a program to recruit, retain and develop more minorities for the investment bank. Consultant Lowery credits Morgan Stanley with including key decision makers, such as Vice Chairman Barton Biggs, Lewis and Managing Director Eugene Flood, on the firm's Minority Development Task Force. "In past efforts of this nature," Lowery explains, "the task forces have been composed of lower-level executives and nondecision makers. Because key decision makers were not a part of the process, they didn't buy in, so the task force's recommendations just gathered dust."
Organizations such as NASP have also worked to foment change. Founded in 1985, NASP represents minority investment bankers, bond lawyers, commercial underwriters, investors and brokers, among others, Its goal as a nonprofit organization is to promote professional excellence and equal opportunity for access in careers and business transactions in public and corporate finance. Its current chairman, Malcolmn Pryor of Pryor, McClendon, Counts & Co. is on BLACK ENTERPRISE'S Wall Street all-star list. To contact the National Association of Securities Professionals, call or write: c/o Pryor, McClendon, Counts & Co., 1360 Peachtree St. NE, Suite 880, Atlanta, GA 30309; 404-875-1545.
After three months of investigation, BLACK ENTERPRISE editors and reporters were able to gather a list of about 60 names of senior-level individuals who roughly met our requirements. Interviewing dozens of investment professionals, we realized just how small the universe really was as we kept hearing the same names over and over. Once the eligibility requirements were established, it was clear which 25 would make the cut.
To be eligible for the list, a candidate must work for a domestic investment firm as an investment banker, trader or analyst. Portfolio managers, asset managers and retail brokers were not included in our search. Individuals had to have annual compensation packages (including salary, bonus, stock options and pension plans) starting at $300,000. This figure is higher than the requirements for two other similar lists that BLACK ENTERPRISE has compiled over the last five years. The minimum compensation package for "The 25 Hottest Black Managers in Corporate America" was $250,000 (See February 1988) and for the "21 Women of Power and Influence in Corporate America", it was $100,000 (see August 1991 .)
In addition to the $300,000 cutoff, individuals with titles of panner, managing director, senior vice president and director were carefully reviewed. Vice presidents who managed major desks or major deals also were considered.
Two of these bankers--Garland Wood of Goldman, Sachs & Co. and Michelle Collins of William Blair are full partners in majority-owned firms. Seven managing directors are represented, including Marianne Spraggins of Smith Barney, the only other woman on the list. William Hoyden has the distinction of being the only senior managing director,
Also included on the list are four African-American-owned investment firms. Three of the firms have served as lead or co-lead managers in several substantial municipal finance deals around the country. Although M.R. Beal & Co., Grigshy, Brandford & Co. and Pryor, McClendon, Counts & Co. have made their name in public finance, all three are establishing reputations in corporate and international work. The fourth black-owned firm on the list is Utendahl Capital Partners LP., a 6-month-old boutique that handles taxable fixed-income business.
Breaking a stereotype often perpetuated in mainstream media, the majority of investment bankers on the list (at-large investment banks) were not in municipal and public finance. In fact, more than one-third (eight) handle corporate finance deals such as mergers and acquisitions, debt restructuring and bond trading. Five on the list are in sales and trading, working on a slew of innovative products and services for domestic and international clients. The four in public/municipal finance are leveraging tremendous clout and connections with big-city administrations--white and black--to serve as lead manager of deals ranging from several hundred million to more than a billion dollars.
Of course, MBAs are well-represented on the list. Including the chairmen of the black firms; 18 have MBAs. Six have law degrees; three have both. Only two did not see a real need for a graduate degree.
There's no doubt about it, where you went to school is extremely important in the tightly knit investment community--especially for African-Americans. Of the 21 individuals and the four chairmen of the black firms, 16 have a collective 26 Ivy League degrees. Harvard's business and law schools have the most graduates on the list.
This is a rather young group of high-powered professionals. The average age of participants is 39. Tracy Maitland of Merrill Lynch & Co. Inc., 31, is the youngest; at 51, First Boston Corp.'s Ronald Gault tops the group.
The average length of time these men and women have worked for the investment banks is 11 years. That's because individuals like Gault, with seven years on The Street, started their careers in the public sector, academia or law. Goldman Sachs' Garland Wood and Cornelius "Perk" Thorton, vice president and senior research analyst, respectively, have been at it the longest--each for 20 years.
The examples presented by these outstanding individuals should help to enlighten the entire investment industry to the bottom-line benefits of fostering sophisticated business opportunities for highly talented individuals without restriction based on gender and race.
AGE: the average age is 39, within a range from 31 to 51 years old.
EDUCATION: Eighteen have MBAs, six have law degrees, three have both. These Wall Street all-stars have attended the most prestigious institutions in the country. Sixteen have a total of 26 Ivy League degrees.
AREAS of SPECIALTY: The largest concentration of individuals specialized in corporate finance and mortgage-backed securities. Three of the black-owned finns and four individuals focused their efforts on public finance deals.
SALARY: Total compensation packages (including salary, bonus and pension plans) ranged between at $300,000 and $1 million.
RUNNING HIS OWN RACE
Bernard Beal remembers the advice his high school track coach gave him: Run your own race and don't look back. Since 1988 when he founded M.R. Beal & Co., ranked No. 3 on the 1992 BE INVESTMENT BANK UST, he's done that.
In 1991, the firm senior-managed $113 million worth of new issues. The 42 professional staffers also underwrote $14.1 billion worth of new municipal issues with full creditto each manager.
The New York City-based investment bank has been carving a niche in housing, education and municipal financing. During the past several years, the Carleton College and...