Why Tom Wiesel Wants to Build Stifel

Thomas W. Weisel has spent four decades as a Silicon Valley dealmaker. Now he's betting that his connections and experience can help him build the Midwestern investment bank Stifel Financial (SF) into a bigger force in technology acquisitions and initial public offerings.

Weisel, 69, took the role of Stifel's co-chairman last month after the company bought his old firm, Thomas Weisel Partners Group (TWPG), for almost $200 million. Stifel helps customers issue stock, raise debt, and buy and sell companies. It also owns brokerage Stifel Nicolaus. Weisel's challenge is to build Stifel's profile among Bay Area venture capitalists, private equity managers, and executives, many of whom haven't worked with the St. Louis-based bank. While mergers have picked up, some companies prefer to use the biggest investment banks, such as Goldman Sachs (GS) and Morgan Stanley (MS). Weisel also faces a drought of IPOs.

"I've been doing this for 40 years," he says in an interview in his 37th-floor office in San Francisco. "We can have a strategic conversation that any CEO or any board wants to have. We have foot soldiers out in the field talking to both small companies and the big ones."

Weisel has been a force in the Valley since at least 1971, when he added his name to the firm that became Robertson, Colman, Siebel & Weisel. In 1978, Weisel took half the San Francisco company and renamed it Montgomery Securities, which helped shepherd dot-com IPOs, including Yahoo! (YHOO) 1996 offering. Montgomery, along with Alex. Brown & Sons, Hambrecht & Quist, and Robertson Stephens, made up "the four horsemen" of West Coast technology, as Robertson Stephens founder Sandy Robertson called them. Eventually, all four were bought by commercial banks.

Weisel sold Montgomery Securities in 1997 to what would become Bank of America (BAC). A year later he founded Thomas Weisel Partners. Stifel, founded in St. Louis in 1890, has catered to financial-services, industrial, aerospace, and education markets. "We can't be the kind of firm we want to be without being in tech, consumer, and health care," Stifel Chief Executive Officer Ronald J. Kruszewski told analysts in April, explaining the reasons behind his acquisition of Weisel's firm. "It expands us into these key growth sectors of the global economy."

In trying to win more mergers-and-acquisitions business, Stifel will be competing against some prominent advisory boutiques, including San Francisco-based Qatalyst Partners and two New York firms, Moelis & Co. and Lazard (LAZ). Qatalyst CEO Frank Quattrone advised 3Par in its acquisition by Hewlett-Packard (HPQ). Even with deals by Thomas Weisel Partners, Stifel would rank 30th this year among advisers in the technology, health-care, and consumer industries, according to data compiled by Bloomberg.

Weisel grew up in Milwaukee, graduated from Stanford University, and got his MBA from Harvard Business School. His office, decorated with modern art, skiing memorabilia, and Tour de France jerseys, is a showcase of his outside interests. He has supported the San Francisco Museum of Modern Art, the U.S. Ski and Snowboard Team Foundation, and Lance Armstrong's racing team. And he is an athlete himself: He tried out for the Olympic speed skating team in 1959 and competed in skiing and cycling events for decades.

Robert K. Weiler, the former CEO of Phase Forward, tapped Weisel to help sell his company. Oracle agreed to pay $685 million for the Waltham (Mass.)-based business in April. "I met him in 2002, when I first joined Phase Forward as CEO, and he visited us as an emerging company," Weiler says. "He came in and said, 'Let me tell you about your industry.' He knew about our space, our competitors, and the challenges we face." Now, Weisel is counting on transferring that reputation to Stifel: "I'd like, over the next 5 or 10 years, to have Stifel inherit all of the goodwill we've built. That's the motivating factor."

The bottom line: Thomas Weisel, long a force in Silicon Valley, hopes his connections will help win business for his new firm.

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