Dec 17 B. Riley & Co. and Caris & Co., a pair of
southern California-based institutional brokerage firms, said
Monday they have combined in an effort to attract more trading
and banking assignments in a very slow market.
"We're a lot deeper now in covering consumer and technology
companies," said Bryant Riley, who founded B. Riley in 1997.
"This business is so challenging right now that our game plan is
to keep our head down, try to take market share and hope we get
into a better environment."
Riley declined to discuss terms of the deal in which his
firm purchased Caris, which he said generally works with larger
firms than Riley's clientele. Both companies are privately held.
The combined company has about 95 employees, including about
25 from Caris. About 15 of the Caris crew works in sales and
trading capacities and ten in research.
Riley said he and Caris founder Darren Caris discussed the
possibility of combining for about five years but believed now
was the "time to get together" because of rapidly falling
trading commissions, weak equities volume and new regulations
that have led to the demise of many small firms in recent years.
Riley, whose firm last year hired about ten institutional
analysts and salespeople from San Francisco-based Merriman
Holdings' Merriman Capital, said Caris is not weighed
down by long-term employment or lease contracts that have made
it unattractive to combine with many struggling institutional
San Francisco-based Think Equity LLC, Rodman & Renshaw, WJB
Capital Group and Ticonderoga Securities are among small firms
that have shuttered this year.
Caris employees will move into Riley's Los Angeles
headquarters and into its San Francisco office, and retain
satellite locations in San Diego and Atlanta. In New York,
Riley's analysts, traders and salespeople will move into Caris's
Darren Caris will assume the newly created position of
director of capital markets, research sales and trading. Riley
President John Ahn will continue to run corporate finance.
Raising capital for small companies has become Riley's
primary revenue source despite its founding as a stock trading
firm that depended on commissions from large investors. Revenue
from advisory and capital markets businesses is up 30 percent
this year from 2011, Riley said.