Oppenheimer Holdings

Oppenheimer Holdings

Type	Subsidiary
Industry	Financial Services
Founded	1881; 143 years ago (1881)
Founder	Harris C. Fahnestock
Headquarters	New York City , United States
Key people	Albert G. Lowenthal, Chairman
Products	Investment banking Investment management Wealth management
Revenue	$1,019.7 million (2013)
Net income	$25.1 million (2013)
AUM	$25.3 billion (2013)
Number of employees	3500+
Website	www.oppenheimer.com

Oppenheimer Holdings is an American multinational independent investment bank and financial services company offering investment banking, financial advisory services, capital markets services, asset management, wealth management, and related products and services worldwide. The company, which once occupied the One World Financial Center building in Manhattan, now bases its operations at 85 Broad Street in New York City.^[1]

History

Originally created as Oppenheimer & Company, Oppenheimer Holdings was founded in 1950 when a partnership was created to act as a broker-dealer and manage related financial services for large institutional clients.^[2] While the 1960s and 1970s was a time of great prosperity for the company, origins of the firm trace back to 1881. After re-configuring operations in 1975, Oppenheimer & Co. formed three operating subsidiaries:

• Oppenheimer & Co. Inc., a retail brokerage firm
• Oppenheimer Capital Corporation, an institutional investment manager
• Oppenheimer Management Corp. (subsequently spun off and acquired by Invesco)

In the 1980s, OpCo founding partners began looking for a buyer. Mercantile House Holdings, PLC, a publicly owned British corporation, made an offer in 1982, which was accepted and closed a year later. In 1986, a majority interest was bought in Oppenheimer & Co. and Oppenheimer Capital by the firm’s management, Chairman and CEO Stephen Robert and president Nathan Gantcher, along with a small group of their colleagues from Mercantile, for $150 million. A year later, British & Commonwealth Holdings, PLC, acquired Mercantile. The 1990s brought another separation of the original firm when Oppenheimer Capital's senior personnel acquired a majority interest in the subsidiary and separated from OpCo. In 1995, Robert and Gantcher, who controlled about 40 percent of OpCo's equity, became eager to locate additional capital to grow their firm. At first, OpCo explored options of forming a possible alliance with ING Groep NV that eventually fell through. Carrying on with this goal, management set out to merge with a bulge bracket bank that had access to the foreign markets.

Robert and Gantcher entertained offers from the second-largest private German financial institution and retail bank, Bayerische Vereinsbank. On Thursday, May 8, 1997, the Wall Street Journal announced that Pittsburgh-based PNC Bank Corp. was in talks to buy Oppenheimer & Co. for about $500 million in cash, stock, and options. The article's source warned that PNC and Oppenheimer hadn't arrived at a fixed price and that chatter could break the formal agreement, which was two weeks or more away. Analysts speculated that PNC would be paying too much for a brokerage house that no longer carried the brand recognition it once did in the securities industry. Only 13 days following the announcement, the Bloomberg News desk announced that for the third time in two years, OpCo had been abandoned by a prospective buyer. Two months later, it was announced that CIBC wanted to expand its brokerage business and was interested in the New York-based investment banking firm, which had annual revenues of $800 million and 680 brokers who sell stocks and bonds.

CIBC Oppenheimer

Nathan Gantcher, who joined Oppenheimer & Co. as a stockbroker in 1968, along with his partner Stephen Robert, who joined Oppenheimer Management, Inc. the same year as a portfolio manager, began talks with CIBC in July 1997. Fourth time being the charm, CIBC closed on Oppenheimer Holdings, Inc. in November 1997, for $525 million and was paid over the next three years and included $175 million in order to retain the loyalty of key Oppenheimer executives who were not shareholders in the closely held private firm. The purchase was made through CIBC's existing US-based investment banking arm, CIBC Wood Gundy. However, with the deal having been closed, the firm's name was changed to CIBC Oppenheimer Holdings. CIBC Wood Gundy continued to act as the operating name in Canada, yet all European and Asian subsidiaries took the CIBC Oppenheimer name.

In 2003, CIBC made the decision to sell Oppenheimer’s retail brokerage business and name for $257 million to Fahnestock Viner Holdings, which subsequently changed its name to Oppenheimer. This separation was a sore wound among the institutional employees. Upon this sale, CIBC unified all CIBC Wood Gundy and CIBC Oppenheimer operations under the CIBC World Markets name.

Fahnestock Viner holdings

Fahnestock Viner traces its lineage back to Harris C. Fahnestock, an investment banker who was a founding member of one of Citigroup's predecessors, the First National Bank of New York. In 1881, Harris' son William formed his own investment bank at Two Wall Street, Fahnestock & Co., which expanded through the decades and was eventually acquired in 1988 by E.A. Viner Holdings, Ltd. The new company, Fahnestock Viner Holdings, would eventually change its name in 2003 upon the acquisition of CIBC Oppenheimer's retail brokerage business (the Private Client and U.S. Asset Management Divisions). Upon this acquisition, the new Oppenheimer & Co. would attempt to build an institutional division brandishing the once infamous Oppenheimer moniker. After several unsuccessful tries, Oppenheimer & Co. in late 2007 announced that they would be purchasing certain assets from CIBC World Markets.

CIBC World Markets

On November 4, 2007, CIBC announced from Toronto that they agreed to sell to Oppenheimer & Co. its U.S. domestic investment banking, equities, leveraged finance, and related debt capital markets businesses. The transaction also included CIBC's Israeli investment banking and equities business, and certain parts of other U.S. capital markets-related businesses located in the UK and Asia. The formal agreement dictated that Oppenheimer would borrow $100 million from CIBC in the form of a subordinated debt as well as a warehouse facility provided by the Canadian bank. The warehousing facility, initially up to $1.5 billion, would allow the newly formed Oppenheimer U.S. entity to finance and hold the syndicated loans for U.S. middle market companies. Underwriting of loans pursuant to the warehouse facility would be subject to joint credit approval by Oppenheimer and CIBC. In doing so, CIBC would benefit from the future success of Oppenheimer & Co. Some speculated that this sale was the result of the 2005 settlement of the civil lawsuits related to CIBC's entanglement with Enron for about $3 billion. It was one of the largest such settlements to date and believed to adversely affect CIBC operations. For many CIBC World Markets employees who remained from the original Oppenheimer & Co., the sale was reunification of sorts. The deal closed on January 14, 2008, yet both entities would share infrastructure for some time, and possibly office buildings. This included 300 Madison Avenue, the building once set out to be the New York, CIBC Center; however, it was sublet to PriceWaterhouseCoopers after a concern of having all employees under one roof following the 9/11 terrorist attacks and the sale of the U.S. retail brokerage division to Fahnestock.

Settlements with US regulators

In January 2015, Oppenheimer & Co. paid $20 million in civil settlements with U.S. regulators. ^[3]

Business groups

• Wealth Management
• Oppenheimer Asset Management
• Oppenheimer Trust Company
• Capital Markets

Major locations

United States

• New York City
• Atlanta
• Boston
• Denver
• Houston
• Los Angeles
• San Francisco
• Stamford

International

• London, United Kingdom
• Hong Kong, China SAR
• Tel Aviv, Israel
• Geneva, Switzerland
• Frankfurt, Germany

Notable current and former equity research analysts

Business

• Henry Blodget - equity research analyst
• Russ Dallen - Latin American research analyst ^[4][5]
• Steve Eisman - equity research analyst
• Leon Levy who co-founded the Oppenheimer mutual funds in 1959
• Meredith Whitney - equity research analyst
• Carter Braxton Worth - technical analyst

See also

• CIBC World Markets
• Wood Gundy Inc.

References

External links

• Oppenheimer & Co Official Website
• CIBC sells Oppenheimer unit for $400 million

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