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Stifel CEO aims to double Oriel's revenue after takeover
May 12, 2014 / 5:26 PM / 3 years ago

Stifel CEO aims to double Oriel's revenue after takeover

LONDON (Reuters) - The chief executive of U.S. wealth manager and investment bank Stifel Financial (SF.N) aims to double revenue at Oriel Securities, the mid-market British investment bank and stockbroker it is buying.

Missouri-based Stifel said last week it planned to complete the acquisition of employee-owned Oriel by the end of September.

Oriel’s 110 staff will bring the total at the enlarged company to just over 5,900. It will operate separately from Keefe, Bruyette & Woods (KBW), the investment bank and broker dealer that merged with Stifel in February 2013.

The financial terms of the deal, which has yet to be approved by the British financial regulator, were not disclosed.

“We’re not here doing this deal to be nice, we’re doing this to double this business. We see a big market opportunity,” Ronald Kruszewski, who is also chairman and president of Stifel, told Reuters in an interview on Monday.

The Oriel deal gives Stifel a business with “a couple of hundred million” in revenue and should allow for cross-selling between its equity sales and trading platforms and the institutional fixed-income business Stifel bought from Knight Capital Group KCGI.UL last year.

Speaking at Oriel’s London headquarters, Kruszewski, who has led Stifel for 17 years, declined to give specific revenue or growth targets, saying he believes that in financial services “quantitative goals lead to qualitative compromises”.

He said Oriel’s chief executive Simon Bragg, who will lead Stifel’s expanded European operations, will have as much time as is needed to build the business.

Stifel, which aims to compete with giants Goldman Sachs (GS.N), Morgan Stanley (MS.N) as well as boutique firms such as Raymond James, would also consider establishing a wealth management business in London, Kruszewski said, if the right opportunity arose.

“I‘m in one of the world’s financial centers, there’s a lot of wealth in London, the markets are not much different to ours (the U.S.), there are individuals who want advice. There are a lot of smaller, independent players that might be attracted to a platform has fixed income and research and U.S. research (capabilities) and wanted to grow,” he said.

Kruszewski said, however, he was not actively looking for targets, preferring to take time over such decisions.

The father of four played down uncertainty over Ukraine and gave a bullish outlook for Europe, expecting the macroeconomic environment to improve and stock markets to rise. By far his biggest concern is too much regulation of financial services.

“Regulation can go too far to take risk out of a system, which made Britain and London, the U.S. and New York the great societies that they are, despite all of their faults. Capitalism is still the best system I’ve known,” he said.

“I want smart risk takers to succeed.”

Editing by Erica Billingham

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