Wells Fargo Securities, a unit of Wells Fargo & Company (WFC) has struck a deal with Citadel Securities as part of its effort to expand its investment banking business. Under the agreement, not only will 25 investment banking professionals and related administrative staff from Citadel Securities join Wells Fargo, but will also bring home related investment banking businesses.
The hired team will be led by Brian Maier, who will join as a vice chairman in Wells Fargo Securities’ Client Coverage. Previously, he headed the Investment Banking at Citadel Securities and served at Merrill Lynch and Goldman Sachs Group Inc. (GS).
Besides Maier, the team comprises a number of senior bankers. They include Stephen Gerson who joins as a senior banker in the Financial Technologies practice and Aviv Laurence as a senior banker in the Gaming and Leisure practice. Paul Pepe will lead a newly formed Corporate Finance team and Stavros Tsibiridis joins the Mergers and Acquisitions group to expand a number of areas including its corporate defense advisory practice.
The deal is a strategic fit for both Citadel and Wells Fargo. Over the last three years Citadel tried to build a strong investment banking platform, to no effect. The business suffered from substantial turnovers of executives. It closed down its stock research business last week and is focusing on its core operations.
Wells Fargo, on the other hand, stands to benefit not only from the important hires from Citadel but also from the transfer of related businesses, which are expected to aid top-line growth immediately. Hence, such tactical efforts to boost its investment banking business augur well for investors.
Wells Fargo currently retains its Zacks #3 Rank, which translates into a short-term Hold rating. Also, considering the fundamentals, we are maintaining a long-term Neutral recommendation on the stock.
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