U.S. Bancorp Piper Jaffray has established a seven-member New York equities sales and trading office, which it says will double in size in the coming months.
The Minneapolis-based investment banking arm of U.S. Bancorp already has an investment banking and fixed-income presence in New York.
In an interview Wednesday, Antonio Cecin, the head of equity trading at Piper Jaffray, said it wanted to be physically closer to some of its clients, many of whom are based in the Big Apple.
"We can bring more value to the table by having more face-to-face time with our clients," Mr. Cecin said.
The New York trading office opened last week in the Chrysler Building in midtown Manhattan. The building already housed some of U.S. Bancorp's analysts, bankers, and fixed-income employees.
Mr. Cecin said that Piper Jaffray plans to hire another eight professionals over the next several months.
The timing of the move works for a number of reasons, he said. "Our core nondeal business [research-driven institutional sales commissions] has continued to grow consistently in the face of a bear market environment."
But Piper Jaffray is following the lead of other commercial bank-owned investment banking units, like Banc of America Securities, in picking up talent from Wall Street's recent layoffs.
The state of the market has "caused several high-quality people to be available, and we wanted to seize on that opportunity to hire some of those people," Mr. Cecin said.
The last piece of the equation that motivated Piper to expand is that it just broadened its research platform, adding analysts to cover fields such as real estate investment trusts, he said.
The move to New York came less than two months after U.S. Bancorp granted the investment banking unit some autonomy in exchange for a percentage of its revenues.
Under the new structure, which is expected to take effect in the third quarter, Piper Jaffray would remain a subsidiary of U.S. Bancorp, with the latitude to set its own compensation, benefit, and retirement plans. It would also have independent human resources, legal, and compliance departments, and would be able to make it own decisions about capital expenditures, including its marketing and technology budgets.
But according to Mr. Cecin, Piper Jaffray would have opened the New York equity office even if it had not redefined its relationship with its parent.
"We would have made the same strategic moves whether we were dependent or independent of the bank," he said. "They've never infringed on whatever strategy we may have had at the time."
However, Stephen Biggar, an analyst with Standard & Poor's questioned the company's bid to expand in a down market.
"Certainly the timing is questionable," he said. "On the flip side, they want to be prepared for the eventual recovery so this gives them a leg up."
