Suddenly, Wall Street investment houses seem to be churning out entrepreneurs.

New companies, especially in specialty finance, are cropping up, founded not by the hardscrabble self-made men you might expect at start-ups but by executives with years of investment banking under their belts.

These new business barons are products of today's Wall Street, a place with "more money than ideas," according to Gary Busacca. Mr. Busacca, who recently left Lehman Brothers, co-founded Phoenix Finance, a distressed- asset specialist, with Nathan Kornfeld, another Wall Street veteran.

Capital is plentiful, especially for someone who has spent years building up contacts with investors. And a rash of initial public offerings by specialty finance companies in recent years, combined with a booming market in asset-backed securities, is adding to the migration.

Executives at investment houses have spent months evaluating companies that cater to the unbanked, rating pools of their loans, and selling them off to investors. And they have watched the founders cash in when the companies were bought at premium prices.

Now, it seems, these Wall Street executives want to try their hands at the business.

Though each entrepreneur's story is slightly different, they all insist that the real lure is not the money that can be made by forming a company and selling it off. Instead it's the universal desire to be your own boss, and the excitement that occurs when every decision counts.

"Here almost everything you do directly affects your business," Mr. Busacca said. "Everything goes right to the bottom line."

Being your own boss allows you "the flexibility to execute an idea you believe in," he said. "We can pick up the phone and make the call, and not have to worry 'Is that banking's job? Is that someone else's client?'"

Choosing a second career as an entrepreneur is common for driven executives in their late thirties and early forties, especially on Wall Street, said Jeffrey A. Goldberg, a New York psychologist who studies work- related issues. "What's inspiring them is the notion of being challenged. They're seeking more autonomy."

Investment banking is changing, and many seem to find the field does not provide enough challenge anymore.

Alex Noujaim recently left a managing directorship at Morgan Stanley to start Phoenicia, a real estate investment trust asset management firm. Managing directors Anthony Tufariello, co-head of commercial mortgage, and Ignacio Fanlo, head of securitized debt trading, were his co-founders.

"Firms are getting larger," Mr. Noujaim said. "Morgan Stanley now has 45,000 employees; when I joined there were 6,000 to 9,000.

"How much opportunity is there remaining?" he asked. To stay with so large a firm "you either need to become a specialist or become a manager of people," he said.

"Five years from now, I don't want to be subject to some big corporate behemoth," Mr. Noujaim said. "I want to be able to take my daughter to school if I have to."

Other examples include Gordon Monson, formerly with PaineWebber, who traded in a top level position to form Westmont Capital, a high-loan-to- value lender; and Jennifer Schneider, who left Chase Manhattan's asset- backed group to join him.

Cary Thompson left Natwest Securities to join Aames Financial Corp., Los Angeles, succeeding founder and chief executive Gary Judis. Analysts say Mr. Thompson was brought in to increase profitability and credibility at the subprime lender. (The plan seems to be working; noted investors Ronald Perelman and Gerald Ford recently bought 10% of the company, in a move widely believed to be a precursor to a sale.)

Several profitable years for Wall Street are feeding the start-up phenomena. "Guys have had some decent paydays over the past two to five years," acquiring the financial cushion needed to trade the relative security of an investment house for their own companies, Mr. Busacca said.

"If the street had had five mediocre years, you wouldn't be seeing this."

Others recent Wall Street exiles were prompted by consolidation to trade investment banking for a more entrepreneurial role.

For example, William Cherry, head of Southern Pacific Funding Corp.'s start-up U.K. unit, left his managing directorship with Kidder Peabody when it was sold to PaineWebber. He joined Southern Pacific as a consultant in the spring of 1996 and started the company's U.K. loan office that September.

"I was the only employee when we first started," he joked. The unit did about $80 million in business in 1997 and is expected to rack up significantly more this year.

The move off Wall Street is also "an age thing," Mr. Cherry said. "You don't see many investment bankers over 40."

Martin Finegold struck it rich with the subprime mortgage company he formed, but says it is not easy. Kensington Mortgage Corp., London, which he founded after nine years at Goldman Sachs, is now the largest such company in the United Kingdom. It recently sold off a 35% share for $40 million.

The entrepreneur's life is not as independent as it seems, Mr. Finegold said. "You have a much wider range of responsibility to people-you're serving them," he said. But "do you run the show? Absolutely not."

Furthermore, he said, new company owners looking for a fast buck are "in for a rude awakening."

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