Sandler O'Neill & Partners said Thursday that it is launching a company to create fund pools that will invest in the stock of financial companies.
Principals in the new venture declined to estimate the size of investment planned, but said they expect to be a significant source of capital for the banks and other financial institutions.
The New York investment banking firm, which was founded in 1988 to advise and structure financings for small to midsize banks and thrifts, has lured Terry A. Maltese from Keefe Managers, a noted fund manager that specializes in banks. He will serve as president of the new firm, Sandler O'Neill Asset Management.
"An asset management firm specializing in financial institutions is a logical extension of our business," said Herman Sandler, senior managing principal of Sandler O'Neill.
The company, described as a joint venture between Sandler O'Neill and Mr. Maltese, will be capitalized separately and will not operate from Sandler O'Neill's headquarters.
It will invest in small and large banks, thrifts, insurance companies, and other financial institutions, Mr. Sandler said.
Mr. Maltese said that "there's plenty of good value out there," and that some investment opportunities may have emerged as a result of the recent stock market decline. He noted that the firm is not obliged to be fully invested if market conditions weigh against it.
Mr. Maltese, an accountant, has worked as an analyst at Keefe Managers for the past five years.