Feb. 2 (Bloomberg) -- Robert Cummings, one of four managing principals who helped start boutique investment bank StormHarbour Partners LP in 2009, is leaving the firm to pursue other opportunities, the company said.
Cummings, part of StormHarbour’s senior executive team and governance group, focused on the firm’s sales, trading and research division, according to an e-mailed statement. The Citigroup Inc. managing director, who ran the bank’s European credit products distribution group before joining StormHarbour, said in an interview he hasn’t decided on his next step.
“It’s unfortunate to lose someone of Bobby’s experience and the way he approaches clients and the business, but there are a number of reasons why it made sense for him to look at other opportunities,” Fredrick Chapey, co-founder and managing principal at StormHarbour in New York, said in a telephone interview.
StormHarbour said Jan. 25 it hired Eric Daniels, the former chief executive officer of Lloyds Banking Group Plc, as a principal and senior adviser.
The firm was one of about 70 firms that entered the business in 2009 when larger competitors reduced trading as they suffered losses and had to preserve capital, Roger Freeman, an analyst at Barclays Capital in New York, said in a January 2011 interview.
The boutique brokers began to struggle after $12.8 trillion of government bailouts healed credit markets and cut profit margins by more than 80 percent. Traders that left formerly dominant big banks to join smaller firms quickly abandoned the commission-based pay structure used by many boutiques and sought guaranteed compensation.
Chapey said StormHarbour has withstood defections and lower trading volumes and maintained market share because it offers other services than trading.
“Our business, which includes sales and trading, advisory and capital markets, gives us broad opportunities,” he said.
StormHarbour’s sales and trading business primarily deals in high-yield and distressed debt, Chapey said. The firm also trades securitized products such as collateralized debt and loan obligations, he said.
--With assistance from Matthew Leising in New York. Editors: Shannon D. Harrington, John Parry
To contact the reporters on this story: Joseph Ciolli in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Alan Goldstein at email@example.com