Raymond James' retail businesses are still a steadying force during difficult times for its capital markets units.
“The capital markets business is spotty,” Paul Reilly,
Raymond James' chief executive, said in an interview yesterday at a meeting of the firm's independent investment advisers in St. Petersburg, Fla.
“Low interest rates and lower fixed-income profits are not good for bond trading,” he said.
What's more, the industry has not seen a public offering for several months, “so investment banking is going to be off,” Mr. Reilly said.
But the firm's mergers-and-acquisitions business has been strong and there is a large backlog in equity underwritings, as issuers are waiting for improved markets, he added.
“It's going to come back,” Mr. Reilly said of the underwriting business.
Meanwhile, the firm's retail units are holding steady. Assets under administration by all of the firm's retail advisers and brokers totaled $269.4 billion as of last month, down just 2.2% from $275.5 billion in July and 14% higher than August 2010.
Earnings results for the fiscal year ended Sept. 30 are due tomorrow. Mr. Reilly wouldn't comment on specifics, but indicated the firm would add to its 94 straight quarters of profitability.
Raymond James has taken advantage of market turmoil to add staff, he added. In addition to recruiting retail advisers, “we've added to investment banking, the municipal business and the fixed-income business” — even as other firms have cut back, Mr. Reilly said.
The firm has tried to build capital markets in areas that have some synergy with retail, such as real estate investment trusts, master limited partnerships, technology and municipal bonds.
Mr. Reilly also talked up the firm's efforts to build a better technology platform.
“We're making big investments in technology,” he said. “We want to benchmark ourselves against the wirehouses and the Schwabs and Fidelitys of the world.”
The firm has added three new technology positions in recent months. In June, Bella Loykhter Allaire became executive vice president of technology and operations, and this month Vincent Campagnoli joined as head of technology strategy and development for the firm's retail units.
Ms. Loykhter Allaire and Mr. Campagnoli have had technology stints at wirehouses.
Mr. Reilly said he's in the midst of adding a chief technology architect — another new position — but the name of that new hire has not yet been announced.
