FleetBoston Plans to Keep Hands-Off Approach to Robertson Stephens Unit
Mandaro, Laura, American Banker
Less than two months after the merger of Fleet Financial Group and BankBoston Corp., the northeastern giant created by the deal is unleashing one of its acquisition prizes: the West Coast equities specialist Robertson Stephens.
Not that FleetBoston Financial Corp. is planning to sell the investment bank. Rather, the $185 billion-asset banking company has decided to take an even more hands-off approach to Robertson Stephens than the firm's previous string of parent companies, to avoid stifling the unit.
Though FleetBoston is looking for ways to cross-sell its equity and debt expertise, it has drawn clear lines between the investment bank, which competes with the bulge-bracket Wall Street firms for deals in the booming high-tech market, and the rest of its corporate banking practice.
"We're still quite independent," said Robert L. Emery, president and co-head of Robertson Stephens, in an interview in New York last week.
That autonomy has been maintained by separate reporting lines, and reinforced psychologically by a decision to drop any mention of the parent company from San Francisco-based Robertson Stephens' name.
The company has placed responsibility for fixed-income activities firmly in its Boston headquarters, under the leadership of Tim Conway, the former head of investment banking at Fleet's investment bank and broker-dealer, Fleet Securities Inc.
The reporting lines are in parallel: Mr. Conway, as well as Mr. Emery and Robertson Stephens chief executive Michael McCaffery, all report to FleetBoston vice chairman Paul Hogan in Boston.
In many ways this is an extension of the strategy BankBoston took when it bought Robertson Stephens in August 1998, though that company put its mark on the firm by renaming it BancBoston Robertson Stephens.
FleetBoston's moves are an effort to dodge the problems that have arisen in some similar deals. When NationsBank Corp. bought San Francisco competitor Montgomery Securities in 1997, for example, the bank's tight control over its acquisition was one of the reasons Montgomery chief executive Thomas Weisel and 100 bankers left to set up a rival firm a few doors away from Montgomery.
"Fleet doesn't want to kill the goose that laid the golden egg," said Andrew Collins, an analyst at ING Barings in New York. "(The bank) saw what happened with Bank of America's acquisition of Montgomery and decided it didn't want to make the same mistakes," he said.
Robertson Stephens said the parent company intends for the investment bank to maintain its focus on emerging companies in its core sectors: technology, life sciences and health care, and consumer businesses.
"We're not migrating towards industries that don't have the growth characteristics of our core businesses, such as the energy or transportation sector, where Fleet may have corporate banking relationships," Mr. Emery said.
Instead, it is expanding in key areas such as the Internet, adding analysts to cover newer businesses such as Web-based retail companies, and working with its parent in areas where both have strengths, such as media and real estate. …