Howe Barnes Investments Inc. of Chicago is preparing to launch a private investment fund focused on bank stocks.
The firm announced on Monday that it had formed a joint venture with Michael E. Sammon, its banking department manager, to create the fund. The deal is expected to close in about six weeks.
HBI Investment Funds LLC, the venture that would manage the fund, would be run by Mr. Sammon and Brad Ness, a banking analyst at the firm.
At Howe Barnes, Mr. Sammon and Mr. Ness have focused on community and regional banks with assets between $500 million and $5 billion.
"Mike Sammon's 30 years of experience analyzing and trading community bank stocks makes him the best possible choice to manage the fund," said John Hawke, president and chief executive officer at Howe Barnes, in a prepared statement.
Mr. Sammon's father, Howard, was president of the American Bankers Association in the late 1950s. Michael Sammon has been managing the firm's banking department for eight years, having spent 10 at Chicago Corp., now a unit of ABN Amro.
Mr. Sammon is legally restrained from giving information before the fund is fully established and the joint venture is closed. But in giving up his management position to move from analyzing to investment, his actions seem to speak of confidence in banking stocks. The press release said Mr. Sammon is looking forward to teaming up with Mr. Ness, whom The Wall Street Journal on July 25 named "Best on the Street" among banking analysts. In that article, Mr. Ness named Denver's Colorado Business Bankshares and Boston Private Financial Holdings as his favorite financial institutions.
Bank stocks posted another lackluster day Wednesday despite news of a 0.2% rise of the consumer price index that was perceived by analysts as yet another sign that the Federal Reserve Board will not raise interest rates next week.
"When energy prices are tame, as they were in July," said Kenneth T. Mayland, president of Clearview Economics LLC, "the overall inflation situation remains benign. The remarkable and distinguishing thing about the nation's recent inflation performance is that there has been very little pass-through of higher energy prices to wages and the prices of other goods and services."
David Stumpf, an analyst at A. G. Edwards, said the slowing economy is "not all good news" for banks as it could also mean the end of a credit cycle and subsequently slowing revenue growth.
The American Banker index of top 50 banks fell 1.7%.
