Cantor Fitzgerald LP, the New York-based securities firm, bought Ireland’s Dolmen Stockbrokers and plans to hire at least 200 staff at its brokerage arm next year to take market share from rivals and grow in asset management.
Dolmen, a Dublin-based securities firm with 90 employees, is the U.S. company’s first Irish acquisition, according to a statement today from Cantor, which is applying to be a primary dealer of government bonds in Ireland. Terms of the sale weren’t disclosed.
“We are looking to be the No. 1 fixed-income dealer in Ireland in a relatively short period of time,” Shawn Matthews, chief executive officer of Cantor Fitzgerald & Co., the company’s brokerage and investment-banking arm, said in an interview. “We are still aggressively looking to expand. I can see us adding at least 200 people over the next year.”
Cantor is hiring as other global financial firms shed more than 88,500 jobs this year. Matthews said Cantor will offer fixed-income and equity underwriting, trading, wealth-management and pension services in Ireland as the country and its banks recover from the sovereign-debt crisis, returning to markets for the first time since the nation was bailed out.
Matthews said Cantor sees an opportunity in the aftermath of the Irish housing bust through repackaging mortgages into securities to get them off troubled lenders’ books.
“We are looking to go in there to solve part of that issue,” he said. “I think the solution will come through securitizations of real-estate loans.”
Matthews said Cantor will keep building its fixed income and equity businesses, and will also seek to expand in asset management through acquisitions in the U.S. and Europe. The 67-year-old firm employs about 1,600 people worldwide, up from 1,400 last year, according to its website. It lost 658 of 960 New York staff in the Sept. 11, 2001 terrorist attacks.
Dolmen CEO and co-founder Ronan Reid said Dolmen’s pretax loss narrowed to 1.9 million euros ($2.5 million) in 2011 from 2.5 million euros a year earlier, while revenue rose 1 percent to 12.4 million euros. Revenue in the first 10 months of 2012 has already exceeded last year’s total, partly on institutional demand for fixed-income services, he said.
“Ireland Inc. is in refinancing mode,” Reid said in an interview. The takeover “allows us to be able to participate in that, with major global distribution.”
Last month, the country’s largest two lenders, Bank of Ireland Plc and Allied Irish Banks Plc, each sold their first public bonds since 2010. Ireland’s government was forced to seek an international bailout in 2010 as the cost of rescuing its banks became too much to handle. It re-entered the long-term bond markets in July for the first time in almost two years.
Reid said the division may hire as many as 30 people over the next two years, which would bring employment to 120 staff, compared with Dolmen’s peak of 130 before the crisis. More Irish acquisitions to “further diversify the client base” may follow, he said.
Reid, who founded the firm with Paul McGowan in 1995, said he has committed to stay as CEO of the unit for the next four to five years, and that 14 or 15 other employees are likely to become equity shareholders in Cantor Fitzgerald.
The Dolmen acquisition is the second purchase of an Irish securities firm by a foreign company this year. Investec Plc, which owns a bank and money manager in South Africa and the U.K., bought Dublin-based NCB Stockbrokers in June in a deal estimated to be worth 32.4 million euros.
Allied Irish, which was nationalized in the crisis, sold its Goodbody Stockbrokers unit to Kerry, Ireland-based Fexco Holdings Ltd. for 24 million euros almost two years ago. Bloxham, another securities firm, was put into liquidation in May amid a central bank probe into accounting irregularities.