SAN FRANCISCO - As West Coast investment banks gird themselves for a longer-than-expected slump in the equity markets, First Union Securities has finally launched a California technology investment banking presence that has been in the works for years.

Late Monday, the investment banking and brokerage arm of Charlotte, N.C.-based First Union Corp. announced it had hired Greg Hanson and Greg Daniel, two former J.P. Morgan senior vice presidents, whose mandate will be to build the group from the ground up.

First Union Securities' nascent West Coast practice could expand to include an additional 10 technology investment bankers this year, and another 10 by 2002. And that is just the beginning, according to Wayne Hunter, head of technology investment banking at First Union.

"We'll be steadily building the office over five years," by which point "I would love to see us have 40 to 50 professionals, including mergers-and-acquisition bankers," Mr. Hunter said.

Charlotte, N.C.-based First Union signaled its intentions to ramp up its West Coast presence last summer, when it signed a lease for four floors of office space in the San Francisco financial district's 4 Embarcadero Center.

Likewise, senior management in Charlotte, led by chief executive G. Kennedy Thompson, started last June to push through a restructuring that included cutting back in fixed-income while building capital markets businesses tied to the technology-driven new economy.

Mr. Thompson, formerly the head of capital markets before becoming president and chief operation officer in 1999, was "very supportive" of the group's West Coast designs, Mr. Hunter said.

But the brokerage's growth plans come just as the market for raising capital through equity offerings - the sweet spot in investment banking during the late-1990s bull market - is on the wane. Investment banking groups that focus on technology and growth companies seem to be holding back from the type of widespread layoffs that hit Wall Street in 1998, when bond markets plunged into turmoil. But that could change if equity markets do not pick up soon, observers say.

Still First Union's timing should actually make it easier to recruit professionals.

"It's much easier to build a quality information technology banking practice [now] than in a bull market, particularly as some of the investment banks that went on huge staffing drives over the last two years find they don't need all these new hires," said Mr. Hunter.

And the company's growth plans in technology banking are not just focused on the West Coast, though that is where most of its new hires will be made. In October First Union hired Greg Ager, a investment banker from Thomas Weisel Partners in San Francisco, to co-head and help build its practice in the high-tech corridor outside of Washington, D.C.

Mr. Hansen and Mr. Daniel, who are now managing directors, started at First Union on Tuesday. They will focus on software, semiconductor and communications sectors, and have experience in equity raising and mergers advisory.

A relative newcomer to equity capital markets - it entered the equity underwriting business in the September of 1999 - First Union is one of the last big East Coast commercial banks to target the capital raising needs of technology companies on the West Coast. Legacy companies of Bank of America Corp. and J.P. Morgan Chase & Co. were the two most notable examples, buying San Francisco investment banks Montgomery Securities and Hambrecht & Quist Group, respectively, to establish a equity platform with strong ties to the new economy.

And First Union has been busy buying and integrating East Coast brokerages in recent years.

In 1998, it bought Wheat First Butcher Singer Inc., a Richmond, Va.-based investment bank and brokerage and Bowles Hollowell Conner & Co., a North Carolina-based mergers advisory boutique.

Although Mr. Hunter - a former telecommunications banker - hails from Wheat First, the bulk of First Union's expertise in tech research and distribution capabilities came from the hiring of about 70 salespeople, traders and analysts from Deutsche Alex. Brown's Baltimore offices in 1999 and 2000.

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