Brean Capital Closes Most of Equities Business, Fires 35 People

  • Financial institutions group only part of equities to survive
  • Brean says bond trading is now more significant than stocks

Brean Capital LLC, a boutique investment bank, is closing most of its equities business, the latest sign that it’s hard for all but the biggest banks to make money trading stocks.

The New York-based firm is firing 35 people, leaving about 150 employees, Chief Executive Officer Rob Fine said Friday. The only part of its equities unit that will continue is the financial-institutions group, which covers bank stocks. Brean’s bond-trading business has grown over the last four years to the point that it was more significant than equities, he said.

“It didn’t make sense for us to remain in areas of the equity capital markets where we didn’t bring a strong enough value-add to our client base,” Fine said in a telephone interview.

Stock trading has become less profitable as competition from high-speed firms has driven down transaction costs to just a few pennies a share. CRT Capital Group LLC, a private-equity backed brokerage, closed last year after struggling to wrest trading business from large Wall Street banks in the years since the financial crisis.

Brean’s decision is “indicative of what’s happening at most smaller firms,” said Richard Lipstein, managing director of New York-based recruiting company Gilbert Tweed International. “They’re having trouble making money in the equity business.”

— With assistance by Zeke Faux

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