Parent goes public
JMP Securities is one of two subsidiaries operated by JMP Group Inc. (the other is Harvest Capital Strategies). Founded in 1999, San Francisco-based JMP Group spent many years insisting it wouldn’t follow other boutiques down the IPO road, but in February 2007, it filed to go public. Its own JMP Securities, as well as Merrill Lynch and Keefe, Bruyette & Woods, were signed on as joint book runners, and in May 2007, eight million shares were priced at $11 each. Although many boutique banks met with resistance when their IPOs launched, analysts had a rosier outlook for JMP, citing its diverse lines of business and strong earnings potential.
Business at JMP Securities is divided between investment banking, equity research, and institutional equity sales and trading. Its industry focus falls on five sectors: consumer, financial services, health care, real estate and technology. Clients include public and private companies. The firm’s headquarters are in San Francisco, with branch offices in New York, Chicago and Boston. Since it was founded, the firm has worked on over 440 investment deals worth a total of more than $49 billion.
Belief in boutiques
Joseph A. Jolson, Carter D. Mack and Gerald L. Tuttle Jr. founded JMP Group in 1999 and opened JMP Securities at the start of 2000. The trio had previously worked together at Montgomery Securities, which was purchased in 1997 by NationsBank Corp. and became Banc of America Securities following NationsBank’s acquisition of Bank of America the next year. Following the sale of Montgomery, Jolson, Mack and Tuttle decided to jump ship and create their own investment bank. They didn’t like watching top-quality independent research boutiques get swallowed up by big commercial banks and figured that the best solution was to create their own firm. Instead of trying to compete for business with bulge bracket banks focused on large corporate clients, the trio pledged to serve small and mid-sized companies, which were becoming increasingly ignored by Wall Street conglomerates.
To get the firm off the ground, CEO Jolson employed some unusual business practices. In the early years, he capped all base salaries, including his own, at $100,000. He also encouraged multitasking: He personally covered several specialty finance companies for JMP Securities’ research arm, while simultaneously getting JMP Asset Management (now Harvest Capital Strategies) running. In 2002, he attracted former Montgomery Securities partner Craig R. Johnson to help build the firm’s equities business.
JMP also made an early decision to avoid focusing solely on emerging growth opportunities. In contrast to many of its competitors, the firm organized its research department to cover “old economy” sectors like financial services in addition to more cutting-edge industries like high technology. Today, Jolson remains CEO of JMP Group and Johnson serves as its president; both men attend to the operation of Harvest Capital Strategies and its asset-gathering strategy. Co-founder Mack and Mark L. Lehmann serve as co-presidents of JMP Securities; Mack directs investment banking, and Lehmann oversees equities.
Plenty of deals
JMP underwrote equity offerings for a number of firms in 2009 and the first half of 2010. Most recently, in June 2010, it co-managed Higher One's $124.2 million IPO, Felcor Lodging Trust's $174 million secondary offering and Digital Realty Trust's $393.3 million secondary offering. In May 2010, JMP co-managed secondary offerings for Ziopharm ($35 million), Diamond Rock Hospitality ($193.2 million), Resource Capital Corp. ($45.3 million) and American Capital Agency ($177.7 million). In 2009, the firm either co-managed or served as co-lead manager on numerous IPOs for firms such as Colony Financial ($287.5 million), Fortinet ($179.7 million), Crexus ($200 million), CDC Software ($57.6 million) and Cypress Sharpridge ($115.1 million).
600 Montgomery Street
San Francisco, CA 94111
Phone: (415) 835-8900
Employer Type: Public
CEO, JMP Group: Joseph A. Jolson
2010 Employees (All Locations): 183