Wall Street refugees rise above ashes as boutique firms take hold
August 9, 2009
Dominick Mondi, who joined Bear Stearns at age 25 in 1979, remembers how then chief executive Alan "Ace" Greenberg called him every February 10 - his birthday.
The collegial spirit began to fade when Bear went public in 1985. The firm grew into the largest US underwriter of mortgage-backed debt, piled on leverage and topped 14 000 employees. Bear's risks became incalculable, Mondi says. By 2005, the birthday calls to Mondi had stopped.
He kept working 10 hours a day on the 10th floor of Bear's Madison Avenue headquarters. Mondi says he traded more municipal bonds than anybody at the firm for 25 of the 28 years he was there. He never sold his shares, even at their January 2007 peak of $172.61 (about R1 400).
When Bear collapsed 14 months later, and new owner JPMorgan Chase didn't offer him a job, Mondi suffered what he calls a devastating loss, financially and emotionally.
His first thought when his car was stolen was: "What else can they take from me?"
After living through the best and worst of Wall Street, Mondi, 55, packed up himself, his wife, Cynthia, and their three children and moved from Connecticut to Illinois, north of downtown Chicago. He's resurrecting his career at Mesirow Financial Holdings, a 72-year-old firm that started as a one-person brokerage in the waning days of the Great Depression.
Today, Mesirow sells insurance and develops real estate along with managing investments. Revenue climbed to $467 million in the financial year that ended on March 31, more than doubling from 2003.
Mondi has already contributed a slice of his former Wall Street glory. Mesirow traded $10 billion in municipal bonds in the seven-and-a-half months ended on March 31, compared with $500m in the period a year earlier.
Mondi, who stuffed ads into the Sunday New York Times to work his way through St John's University in Queens and then spent more than half of his life at a single company, became something last year he thought he'd never be: unemployed.
In the worst upheaval in more than 70 years, financial firms have eliminated 326 000 jobs worldwide since the end of June 2007, according to data compiled by Bloomberg.
Companies firing these traders, salesmen and brokers are gone too. Lehman Brothers Holdings is bankrupt and liquidating; Merrill Lynch was subsumed by Bank of America in Charlotte, North Carolina.
After enduring dislocation and doubt, Wall Street refugees are surfacing well beyond the firms that dominated pre-crash banking.
Sixty percent of those who have found jobs have landed at mid-size companies such as Mesirow, says Jason Kennedy, chief executive of Kennedy Associates, an executive recruiter for Wall Street and the City of London.
Mesirow and others may move up in rank if they can hang on to new clients.
"For the next five years, the boutiques are on the rise," says Charles Geisst, a Manhattan College finance professor and author of The Last Partnerships.
Still, Geisst predicts mid-size firms will never match the giants. "They'll have to remain as boutiques because they won't have the capital to compete with Goldman and Morgan Stanley," he says.
When Mesirow relocates to its $450m skyscraper, Mondi's new desk will be on the ninth floor. He'll look out over the Chicago Loop, 1 280km from his old Wall Street perch. That's okay with him.
"When you've been through the devastation of a dream, you have this burning desire to rise above the ashes," he says. - Bloomberg
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