KBW Founder Harry Keefe, 79

During the 1980s, as the chairman of the investment banking firm Keefe, Bruyette & Woods Inc., Harry V. Keefe Jr. engineered some of the banking industry's largest mergers, including the deals that created such giants as SunTrust Banks Inc. and Bank of New England.

Then in 1989, after abruptly quitting the firm he co-founded in 1962, Mr. Keefe launched a second a career as a hedge fund manager. By the end of the 1990s his Keefe Managers Inc. had more than $1 billion invested in community, regional, and money-center banks.

Mr. Keefe, who died Sunday at the age of 79, was widely referred to as the "dean of banking." In a career that spanned more than five decades he was an investment banker, an analyst, a consultant, and an investor. In his later years he also became a favorite of business journalists, who valued his insight and often-colorful commentary.

One issue about which Mr. Keefe was most outspoken was the blurring of the lines between investment banking and traditional banking. In a recent interview over lunch with American Banker columnist Paul Nadler, Mr. Keefe said, "Bankers do not make good investment bankers," and he criticized banks that paid top dollar to recruit investment bankers.

"Good soccer players do not necessarily make good baseball players," he told Mr. Nadler. "Both are athletes, but the games are different."

Though he ran Keefe, Bruyette & Woods for close to three decades, Mr. Keefe was also critical of the sometimes-cozy relationship between the research and investment banking units at investment banking firms. In an article published in Tuesday's American Banker, he said: "Today's Street analysts don't travel. They are too busy seeking new investment banking business and answering salesmen's questions."

Born in Boston, Mr. Keefe graduated from Boston Latin School in 1939, where he won an award as the most "outstanding orator" in his class. After graduating from Amherst College in 1943 he joined the Navy and was a commanding officer of the U.S. LCT 555, which was sunk at Omaha Beach on D-Day in June of 1944. After the war he returned to Boston and earned a master's degree in business from Boston University.

Mr. Keefe began his career in 1946 with the firm R.L. Day. Sixteen years later, with colleagues Gene Bruyette and Norbert Woods, he founded the firm that today ranks as one of the leading merger-and-acquisition advisers for community and regional banks.

John Duffy, Keefe, Bruyette & Woods' chairman and chief executive officer, called Mr. Keefe a "rare combination of terrific competitor and a fair-minded individual."

During his 27 years as the chairman, Mr. Keefe "taught many of us how to do our jobs well and then gave us the opportunity to prove ourselves," Mr. Duffy said in a press statement. "He taught us the value of good research and was not afraid to put the firm's capital at risk to support the conclusions of our research."

Mr. Keefe quit the firm in 1989, though the reason for his departure remains unclear. In a 1992 interview with American Banker, he said he left because of a dispute with his partners over an investment made in a South Carolina thrift. But others said he left after the firm decided to sell its BankWatch unit, which rated the credit risk of certificates of deposit, to Thomson Financial.

(American Banker was then also a unit of Thomson Financial and remains under Thomson Corp. ownership. Thomson sold BankWatch in 2000 to the French company Fimalac, which merged it with its ratings agency Fitch.)

In the 1992 interview, Mr. Keefe said he had no regrets about his decision to leave the firm and start the hedge fund. "I'm having a ball," he said. "Some people like to play golf for a challenge. This is what I do."

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER