Cowen Said to Be in Talks to Purchase Some Units of CRT Capital

  • Deal said to include purchase of some credit businesses
  • CRT stopped trading Treasuries, mortgages in past 12 months

Cowen Group Inc., the New York-based boutique investment firm, is finalizing terms of a deal to buy portions of broker-dealer CRT Capital Group, people with knowledge of the matter said.

Cowen would buy at least six CRT teams, including corporate-credit sales and trading, high-yield and distressed research, and emerging-markets credit, said the people, who asked not to be identified because the talks are private. The deal would also include special-situations equities operations and smaller businesses that trade private securities and bankrupt companies’ liabilities, two people said.

The firms are discussing how many employees of those businesses would be asked to transfer, according to the people, who said the number could be about 50.

Small companies such as CRT, which is led by former Lehman Brothers Holdings Inc. executive Theodore Janulis, have tried to wrest trading business from large Wall Street banks in the years since the financial crisis. In the past 12 months, CRT has exited or scaled back trading operations in mortgage bonds and U.S. Treasuries. The company is backed by private-equity firm Aquiline Capital Partners.

Sterne Agee

“The company doesn’t comment on rumors or speculation,” said Daniel Gagnier, a spokesman for Cowen at Sard Verbinnen & Co.

John Nielsen, general counsel at Stamford, Connecticut-based CRT Capital, and Alex Yankus, a spokesman for Aquiline at Brunswick Group, had no comment.

The people didn’t discuss prospects for CRT’s much larger equities operation, which used to be part of Sterne Agee Group Inc. CRT acquired the 170-person business a year ago from Stifel Financial Corp. for an undisclosed amount.

Equity trading has slumped in the U.S. since the purchase. Revenue from the business this quarter at Bank of America Corp. will be 11 percent to 12 percent less compared with a year ago, people with knowledge of the matter said last week. Citigroup Inc. said this week that first-quarter revenue from trading stocks and bonds will probably drop 15 percent.

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