Energy industry specialists managed $450M at wirehouse
A startup hybrid firm in Houston has scored a coup by landing a team from UBS Financial Services Inc. that brought in $4.5 million in revenue.
The four-broker team, Matt West, Doug Hall, Christian Bauman and Scott Selzer, joined U.S. Capital Advisors LLC last Friday.
They manage approximately $450 million in assets, according to U.S. Capital founder Patrick Mendenhall, a former UBS branch manager in Houston.
The team focuses on retirement planning for executives and employees in the energy industry, he said.
"They're the best at what they do," which is helping retired clients manage the tax and distribution complexities of their various retirement plans, Mr. Mendenhall said.
The team's average account size is $2 million, he said.
Mr. Mendenhall retired from UBS in August 2009 at age 50.
He said his departure was driven by the financial crisis, as well as changes transpiring at the firm.
"We started having to answer questions we never had before, like, ‘Is my money safe there?'" Mr. Mendenhall said.
"Pat was … manager of the largest UBS branch in Texas, and the third- or fourth-largest in the nation," said Houston-based recruiter Rick Peterson.
Mr. Mendenhall is also “an unbelievable recruiter” who will be able to attract many more brokers, said Mr. Peterson, who does not recruit for U.S. Capital.
"They don't need me, at least not yet," he said.
The firm is working to open more offices, Mr. Mendenhall confirmed.
“We're looking at several more cities in Texas, and Chicago as well, over the near term,” he said.
U.S. Capital will be majority-employee-owned, Mr. Mendenhall said.
Initial financing came from several high-net-worth investors, whom he declined to identity.
The new team “took equity in [U.S. Capital] as a majority of their transition” package, Mr. Mendenhall said.
“I pay a fraction of the transition cash” that wirehouses pay, he added. The new recruits were looking to “give clients a better experience," Mr. Mendenhall said.
He achieved some unwanted notoriety in 2002, when it was first reported that he fired one of his brokers at UBS PaineWebber, Chung Wu after Mr. Wu told clients in an e-mail in August 2001 to sell their Enron Corp. stock — well before problems at the company were widely known.
Enron, which ran its stock-option exercise program through the UBS branch in Houston, complained to the brokerage firm and Mr. Wu was fired the same day his e-mail went out.
“That was a corporate decision,” Mr. Mendenhall said of Mr. Wu's dismissal.
“I liked Chung,” he added. “He was a friend of mine. That was a tough, tough day for me.”
