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Sutro to Expand L.A. Presence

Investment banking: With the consolidation of units, the city will in effect serve as a co-headquarters for the firm, based in San Francisco.

October 27, 1998|DEBORA VRANA | TIMES STAFF WRITER

In a reorganization designed to expand its presence in Los Angeles, Sutro & Co., one of California's oldest investment banking firms, will consolidate several corporate finance divisions here because of the growing economic strength of Southern California, the firm said late Monday.

Los Angeles would in effect serve as a co- headquarters for the firm, which has long been based in San Francisco, as part of a reorganization approved by Sutro's board of directors Monday.

Over the years, Sutro has tried with limited success to become a powerhouse regional investment banking firm. This latest move is designed to increase the firm's visibility in this region by increasing its share of financings for growing companies.

At a new, yet-to-be-determined site in the Los Angeles area, Sutro plans to consolidate about 100 employees involved in institutional sales and trading, investment banking, research and investment syndicates.

"We're trying to create a power center in Los Angeles," said Thomas R. Weinberger, 54, the former director of investment banking, who was promoted to president of the firm and will head the equity capital markets group in Los Angeles.

Once the reorganization is complete in the next year, the firm would have nearly half its 670-person staff--almost 300 employees--in Southern California. The firm has offices in La Jolla, Newport Beach, Beverly Hills, Woodland Hills and downtown Los Angeles. About 250 employees are currently based here.

"We see a lot of opportunity here," Weinberger said. "Sutro is one of the oldest and most recognized names in California. Unfortunately, during the '70s and '80s, we weren't as aggressive as we could have been. With our recent changes, we're waking up. With 670 employees, we're not a small firm anymore."

As part of the reorganization, several executives were promoted along with Weinberger.

John F. Luikart, formerly president of Sutro, was named chairman of the board and will continue to serve as Sutro's chief executive. Scott E. Wendelin, associate director of investment banking, was named president of investment banking. Eugene Melnitchenko is the new head of research.

Sutro specializes in financing for small to medium-sized firms, including private placements or money from private investors, and public stock offerings. The firm also works on mergers and acquisitions, as well as municipal bond financings for cities, counties and school systems.

Formed in 1858 in San Francisco during the Gold Rush era by German immigrant brothers Gustav and Charles Sutro, the company has gone through dramatic ownership changes in recent years.

Sutro and Boston-based firm Tucker Anthony were both purchased in October 1996 by corporate buyout specialist Thomas H. Lee of Boston. Earlier this year, Freedom Securities Corp., the holding company for the two firms, completed a first-time sale of stock to the public, so Sutro is now part of a public company.

On Monday, Freedom's shares closed unchanged at $12.31 a share in New York Stock Exchange trading. Freedom Securities' stock price has fallen about 50% from its 52-week high in July.

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