ATLANTA - Wheat First Butcher Singer Inc. has made a "substantial" investment in Atlanta-based Jackson Securities Inc., a broker-dealer and financial advisory firm founded in 1987 by former Atlanta Mayor Maynard Jackson.
Mark M. Gambill, chairman of the capital markets group at Wheat First, said yesterday its stake in Jackson Securities will help the minority-owned firm expand its municipal finance, asset management, and corporate finance operations. Gambill declined to reveal terms, but said that Maynard Jackson will remain Jackson Securities' majority shareholder and chairman.
"Our investment is a substantial one, and it was made because of the opportunities for us to share with them in a number of businesses, and because of the excellent fit between our management styles," Gambill said.
Gambill said that the arrangement follows discussions initiated by Jackson "several months ago." Gambill said the firms are exploring joint ventures, but have not yet worked out specifics. Wheat First, however, has pledged to provide "analytic backup" for the municipal and asset management areas at Jackson Securities, he said.
A source close to Wheat First said that its investment in Jackson Securities was "in the several million dollar range."
In an interview yesterday, Maynard Jackson said, "We are intent on building our firm in an aggressive but prudent fashion, and the strategic alliance with Wheat First will help us accomplish this. Our next step will be attracting to our team the finest talents we can find."
Jackson also declined to provide details of the cash infusion from Wheat First. He said his ownership stake would be less than his original 75%, but "substantially more" than 50%.
Jackson said that because his firm has recently established a separate asset management arm, Jackson Asset Management Inc., one of its priorities will be to hire a president and other top executives for the new unit.
On the municipal finance side, Jackson said, the firm is looking to recruit a senior investment banker, a junior banker, and additional support staff.
"We will be looking to expand in all areas of the municipal bond business, including investment banking, underwriting, and trading," which would probably double the staff to 20 people, he said.
Jackson Securities also intends to grow by acquiring other firms, he said.
"As I see it, minority and women-owned firms are moving towards another phase, one that calls for consolidation," Jackson said.
In addition, the former mayor said that he would work to "help influence public policy to help cities and other local governments to deal with their needs, particularly in housing and infrastructure,"
Jackson, Atlanta's first black mayor, served from 1974 to 1982 and from 1990 to 1994.
In late 1982, Jackson was named partner at Chapman & Cutler, for which he set up a municipal finance practice in Atlanta. He remained with the firm until 1989.
In its latest filing with the Securities and Exchange Commission, Jackson Securities listed yearend 1993 net capital of $116,772, which included minimum capital of $50,000 and excess net capital of $66,772.
The report also listed assets of $130,017, including $123,032 in equity. This compared with assets of $85,098 in 1992, including $84,954 in equity.
The firm reported earnings of $579,680 in 1993, including $300,496 in consulting fees, $261,604 in commissions, $16,703 in investment monitoring fees, and $852 in interest income.
Jackson Securities has been involved as an underwriter in two transactions, an $8 million issue sold by the Dade County, Fla., Educational Facilities Authority in March 1991 and a $190 million issue of solid waste industrial development bonds sold by Dade County, according to Securities Data Co.
So far this year, Wheat First has served as bookrunning manager of 49 issues totaling $654 million, ranking it 16th nationwide as a underwriter of municipal debt, according to Securities Data. In 1993, Wheat First ranked 21st as bookrunning manager, with 147 deals totaling $2.2 billion.