NEW YORK: KGS-Alpha Capital Markets, the brokerage backed by Arsenal Capital Partners, hired Robert Cummings as co-head of corporate credit and plans to expand that business by adding 15 bond traders and salespeople.
Cummings, who helped start StormHarbour Partners in 2009, will help build a KGS team that has 20 corporate-bond salesmen and traders, Cummings said. He’ll work with co-head Anthony Coniglione, a former LLC executive who joined the brokerage last year, and report to co-founders Levent Kahraman and Dan Goldman. Cummings worked with the founders at Citigroup where he was head of investment-grade credit.
KGS was founded in 2010 and has outlasted some of the other bond brokerages that started after Lehman Brothers Holdings collapsed in 2008 in a bet that bigger competitors would pull back and create an opportunity. With more than 150 employees, the firm wants to expand its investment-grade and crossover credit business and go after larger institutional clients, Cummings said.
“We have a very aggressive mandate to grow the business,” Cummings said.
KGS is looking to hire credit traders and salespeople who fit with its culture, rather than adding groups of producers, he said.
KGS started with about US$80 million from a group led by Arsenal, a New York private-equity firm. Some rivals that started bond trading businesses after the financial crisis, including BTIG, Chapdelaine & Co, and LaBranche & Co, were forced to shrink or shut them as the bigger competitors recovered and trading levelled off.
KGS, which also trades mortgage-backed securities and structured products, has done better by focusing on fewer business lines with more capital, Goldman said.
“A lot of firms hung shingles during the crisis and fell by the wayside in a non-capitalised model,” Goldman said. “We’ve been careful about not trying to be all things to all people.”
KGS raised another US$75 million in 2011 from a group led by Healthcare of Ontario Pension Plan, Goldman said. The firm now has almost US$170 million of equity and uses its balance sheet for trading, he said. Goldman wouldn’t comment on the firm’s revenue or profitability.
Before starting StormHarbour, Cummings moved to London with Citigroup in 2008 to lead European credit distribution.
Cummings said he left StormHarbour because the firm’s focus shifted from sales and trading to origination and advisory. Cummings, who played lacrosse at Cornell University, said he took last year off and bicycled in Colorado and Europe.
“The culture of the firm is all about teamwork,” Cummings said. “That really differentiates us when you look at some of the other firms that are just putting bodies in seats.”
(BLOOMBERG)
