CastleOak Securities LP has launched a municipal bond desk, anchoring it with six veterans of the business.
The new hires include municipal finance and institutional sales and trading professionals who will be based in offices throughout the Midwest. They provide underwriting, sales, and trading for a region that includes Ohio, Indiana, Illinois, and Wisconsin.
But the minority-owned, New York-based boutique investment bank has bigger ambitions. It plans to expand its muni coverage from its regional offices into other key locations around the country, such as New York, Texas, and California, said David Jones, CastleOak’s chief executive officer.
The firm will be hiring aggressively over the next 12 to 18 months, he said. But it doesn’t want to limit itself, as far as manpower numbers go, or overextend itself.
“We’re not trying to get our cost base ahead of ourselves,” Jones said. “I’d rather not be in a certain market if I don’t find the right person than overpay someone just to be in California.”
CastleOak primarily is looking to participate in negotiated deals, including those involving variable-rate securities. The firm is also prepared to use its balance sheet to bid in competitive sales, as customers will demand that, Jones said.
Three of CastleOak’s hires served as the core of the public finance team at the former Cleveland-based, minority-owned investment banking firm SBK-Brooks Investment Corp.
Eric Small, who shuttles between Cleveland and Chicago, leads as a senior managing director of CastleOak’s public finance group. He arrived from SBK with 30 years of broad-based capital markets experience, most recently as a lead banker in municipal transactions. Before that, he was a senior investment director in the bond investment department of Aetna Life & Casualty.
Warren Nicholas Potonak, who is based in Cleveland, joined the firm as a managing director with 28 years of institutional sales experience in taxable and tax-exempt bonds. He also came from SBK. Previously, he managed the fixed-income sales desk for Tucker Anthony Inc.
William Matlock, a managing director in CastleOak’s public finance group, is based in Columbus, Ohio. He brought with him more than 25 years of experience in public and private sector investments, as well as treasury and debt management. Before CastleOak, he served as the deputy director of investments and debt management for the office of the Ohio treasurer.
Matthew Middendorf, who is based in Cleveland, joined as a director in CastleOak’s public finance group. Previously, he served as the primary liaison between SBK and its institutional clients. Middendorf brought more than 15 years of experience in both the taxable and tax-exempt markets, focusing primarily on municipal and agency securities.
Gregory Reynolds, who is based in Indianapolis, came aboard as a director in the public finance group. He arrived with 11 years of institutional capital markets experience. Jonathan Ly, who is based in Chicago, joined as a financial analyst. Previously, he was a consultant at Ferrand Consulting Group Inc., and before that was an investment banker with KeyBanc Capital Markets.
