Jefferies Hires From BofA, Cowen for Capital Markets

Jefferies Group Inc., the New York- based brokerage that specializes in mid-sized companies, hired Bank of America Corp.’s Ashley Delp to head its U.S. equity syndicate desk.

The firm also named David Bohn, former co-head of private placements at Cowen & Co., to lead equity financing for closely held companies, according to Mark Connelly, Jefferies’ global head of equity capital markets. Delp, 35, and Bohn are among 10 managing directors that will help Connelly, who joined in August from Zurich-based UBS AG, oversee the second-ranked arranger for health care-related offerings in the U.S. this year.

Connelly, 49, has added at least three senior managers since taking over as he seeks more business for the almost half century-old firm, which lags behind in overall equity underwriting. Jefferies hasn’t placed among the top 10 banks for U.S. initial public offerings, additional share sales and convertible bond issues in the past 11 years, according to data compiled by Bloomberg.

“Our business is growing very, very rapidly right now,” Connelly said. “It represents a further expansion of an effort that we’ve been undertaking for the last four or five months to hire quality origination and equity capital markets product people. In terms of our capital markets team, we’d put our first team out on the field against anybody.”

Team Building

Delp and Bohn, 41, follow Craig McCracken, a former head of equity-linked origination at Charlotte, North Carolina-based Bank of America, who joined in December to head U.S. convertible bonds and equity-linked sales at Jefferies.

Delp worked at Bank of America’s Merrill Lynch & Co. unit for 14 years after graduating from the University of Virginia with a bachelor’s degree in economics. Bohn, who has 12 years of experience in private placements, holds a master’s degree in business administration from Columbia University and a bachelor’s degree from Villanova University.

Connelly’s group has been a lead underwriter for two U.S. IPOs and 13 additional share sales this year, ranking 12th among banks with $867 million in sales, Bloomberg data show. New York-based JPMorgan Chase & Co. has won the biggest share of U.S. equity and equity-linked offerings in 2010, with $11.2 billion.

‘A Different Sell’

Some of the disparity reflects Jefferies’ focus on mid-sized companies with higher than average earnings prospects, rather than private-equity backed offerings, in which leveraged buyout firms often pick banks that financed their LBOs, according to Connelly.

“There’s really no competitive process to win that business and it’s a different sell,” he said.

Jefferies has increased the proportion of deals in which it served as a lead underwriter to about 80 percent this year, according to Connelly. That compares with about 65 percent in 2009 and a third two years ago, he said.

Connelly was one of 36 bankers from UBS’s health-care and equity-capital markets groups that the Swiss bank accused Jefferies of poaching last June in a “massive, premeditated raid,” according to UBS’s petition in the New York Supreme Court dated June 22. UBS and Jefferies said the next month that they “amicably resolved” the lawsuit.

Health-Care Deals

This year, Jefferies is credited with helping six companies in the health-care industry raise $316 million, more than New York-based firms Goldman Sachs Group Inc. and Morgan Stanley, and behind JPMorgan, which was responsible for $388 million, according to data compiled by Bloomberg.

Jefferies also helped Calix Inc. and DynaVox Inc. sell shares in initial offerings. Petaluma, California-based Calix, which sells connection equipment to telephone companies, raised $94.6 million in its IPO at the high end of its forecast range.

The stock, which jumped 16 percent on the first day of trading on March 24, closed at $10.24 yesterday, 21 percent below its IPO price of $13. DynaVox of Pittsburgh, which sold $140.6 million in shares on April 21, has declined 3.3 percent since its IPO. That’s less than the 3.8 percent drop in the Standard & Poor’s 500 Index over the same period.

Jesse Mark, 35, Jefferies’ global head of syndicate, said companies that have hired Jefferies for IPOs and have yet to file publicly will help bolster the firm’s standing.

“We have a great opportunity in the IPO market,” said Mark. “Over time, we’re going to show very well.”

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