After Two Decades, Oppenheimer Returns to Chicago
Traders Magazine Online News, January 26, 2012
After a 20-year hiatus, Oppenheimer & Co. has reopened its doors in Chicago and is launching a new trading desk the firm hopes will expand its business in the Windy City and throughout the Midwest.
Donald O'Shaughnessy
Manning the desk are former Jefferies & Co. veterans Donald O'Shaughnessy and Daniel Stahlschmidt. The formal announcement of the new desk came via an advertisement in last week's program at the Security Traders Association of Chicago midwinter conference.
Cheryl Cargie, veteran head trader at Ariel Investments, which manages $5 billion in equities, said Oppenheimer's new desk is good news for Chicago. For the most part, firms have contracted their desks in recent years. "We love to see institutional brokerage come back to the city," Cargie said.
One head of sales trading in New York said a Chicago office makes sense. First, it cements a firm's traders more firmly into the community and allows them to know the clients better. "It's a different relationship and conversation when you become part of their world and are ingrained in the community," he said.
Also, a Chicago office gives a firm a Midwest presence, providing a springboard to build relationships and expand business with accounts in the region, the head trader said. The downside with this move, however, he added, is that it can affect current coverage: If a sales trader doesn't move to the new office, that sales trader will often lose an account.
Prior to the Chicago desk formation, Midwest clients were serviced by Opco's other regional offices in San Francisco, New York, Boston and London.
Better Coverage
Spearheading the Midwest initiative centered in Chicago is sales trader O'Shaughnessy, who joined the firm in October as head of trading. O'Shaughnessy, a 20-plus-year veteran and Jefferies alum, might be the perfect fit for the task of starting the desk: He's covered the Midwest for two decades. He reports to Peter Feinberg.
"Opco thought it was important to have regional coverage for this important set of clients," O'Shaughnessy said.
The strategy is simple. The firm hopes to leverage off the Opco name, known for its retail branch network throughout the Midwest, to grow its institutional equity business. The desk's goal has been to re-engage clients and get the Opco name out there, O'Shaughnessy said.
"The first one hundred days we did road shows," he said. "Now the next phase is to get out with our research sales team and tackle one city at a time. We want to blanket the clients and let them know they have seamless coverage."
O'Shaughnessy said his desk does not have an electronic platform to offer clients, so all trading will be high-touch. The firm will commit capital for those clients that need it.
"The brand strategy is about monetizing the firm's research product and handle with care the small- and micro-cap orders we get," he said.
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