Over the past year, newcomer Ticonderoga Securities has brought in a brigade of trading and research pros as it strives to build an equities and options presence. And a large block of these–13 in all–arrived from Pali Capital, a brokerage that collapsed earlier this year.
Ticonderoga’s business lines have been growing deliberately, according to the design of its co-founder and chief executive, Shawn McLoughlin. The Pali hires fit the strategy, as much as Ticonderoga fit their needs.
"They believe in what we are doing here," McLoughlin said. They understand that they could probably get better guarantees elsewhere, he added, but recognize that Ticonderoga is building a team for the long haul.
Beyond Pali, talent has arrived in teams from such firms as Newedge and Collins Stewart. And with them, the firm has more than tripled in size, McLoughlin said.
Upon arrival last June, McLoughlin inherited a staff of 22 working from Reynders, Gray, a 30-year-old New York-based broker. After acquiring the firm and renaming it Ticonderoga Securities, he kept eight. The firm now has 77. On the cash equities side, this breaks down to three traders, 12 sales traders, 10 publishing analysts, five associates and four research salesmen.
Despite the upsurge in personnel, Ticonderoga has been taking a measured path to assembling its equities desk. And central to its plans is constructing a solid research presence.
"We felt that in order to succeed, we’d have to have research lead the way for us," McLoughlin said. "In this day and age, and with the way the Street is, although you need to have quality execution, we thought you had to have a good quality research product to get paid."
But research has been just one component to Ticonderoga’s expansion over the past year. The firm now offers U.S. equities trading and research, options trading and research, international market making and risk-arbitrage analysis. In the near term, McLoughlin said he wants to start a program desk and risk-arb sales trading. There are also plans over the next six months to add a fixed income desk.
"It won’t be the right time to do a lot of business [in fixed income], but it’ll be the right time to get talent," he said.
Two years ago, smaller agency brokerages took advantage of the displacement at the larger bulge bracket firms to grow in staff and services. They’d hired traders who either left investment banks or were downsized.
By the end of last year, though, the trend reversed. The large investment banks started hiring again while a shake-out started among smaller execution-only shops. Amid the fallout, Ticonderoga and its ilk began poaching sales, trading and research pros.
To grow Ticonderoga’s various desks selectively, McLoughlin hired industry pros who could work across different products. Cash equities staff would, for example, be able to provide information for the risk-arb desk, or the derivatives desk.
Among the Pali hires, Allen Randolph leads the way as head of institutional sales. He’s followed by two institutional salesmen in Larry Darrow and Dennis Leddy. Ticonderoga hired three senior analysts: Christopher Allen, Douglas Sipkin and Stephen East. And the firm brought aboard from Pali two desk analysts, Andrew Lefberg and Jeremy Stovall, as well as two associate analysts, Warren Gardiner and Paul Przybylski. Ticonderoga also hired three sales traders: Robert Flaherty, Barak Shibles and Justin LaSalle-Tarantin.
McLoughlin said that the three former Pali analysts he hired, who cover the financial and the home-building sectors, respectively, have hit the ground running and are already paying dividends. They’ve brought the firm new scale.
"They have a wide following," McLoughlin said. "It’s allowed us to talk to a lot of accounts and open up a lot of accounts. There’s a big difference between being in certain sectors and having really quality analysts in those sectors. It’s very easy to hire analysts; it’s very difficult to hire good analysts."
Ticonderoga has made several team hires. For derivatives coverage, McLoughlin brought an options team over from Newedge that included one desk analyst and four sales traders.
Ticonderoga also nabbed two teams from Collins Stewart, the London-based firm where McLoughlin worked for two years building out the U.S. brokerage. These included two sales traders in cash equities, as well as 10 traders and sales traders covering Pink Sheets and American Depository Receipts.
McLoughlin renamed Reynders, Gray, Ticonderoga, after the 18th century fort in upstate New York. Ticonderoga has the backing of the giant English interdealer broker ICAP, which acquired a minority stake in Reynders, Gray last year as part of its effort to expand its own equities business. The firm’s market identifier is appropriate given its name: FORT.
