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Small Bank Spies Hiring Opportunity

New hires have been attracted to the bank because it doesn't have layer upon layer of management, so its bankers have a closer working relationship with clients than they would at a larger bank.

August 21, 2012
Related Topics: Top Stories - Frontpage, Growth, Organizational Culture, Policies and Procedures, Recruitment
David Jones, a CastleOak Securities co-founder and its CEO.

While giant banks like Bank of America, Goldman Sachs and Morgan Stanley are cutting staff, the 60-employee boutique investment bank CastleOak Securities is adding jobs. The midtown Manhattan firm has found that now is an ideal time to snap up bankers who were downsized or voluntarily walked away from Wall Street, growing its team substantially since 2006.

"We're not just hiring," said David Jones, a CastleOak co-founder and its CEO. "We're upgrading our talent."

Founded in 2006 by four investment bankers, the minority-owned firm—three of the four co-founders are African-American—now has offices in Atlanta, Chicago, Cleveland, Los Angeles, Portland, Oregon, and Columbus, Ohio. Fueling its expansion, in part, has been the firm's focus on fixed-income securities.

"For the last six years, fixed-income markets have been really growing for us," Jones said. CastleOak is hiring fixed-income, equities and municipal-finance sales professionals and recently began building a municipal-bond team.

New hires have been attracted to the bank because it doesn't have layer upon layer of management, so its bankers have a closer working relationship with clients than they would at a larger bank, noted Jones. And unlike the JPMorgans and Merrills of the world, CastleOak pays its bonuses in cash, not stock that can wind up devalued.

And, of course, more than a few job applicants may not see many prospects elsewhere in the industry in the near term. "We're expecting a reduction in staff [in the next year] anywhere from 10 percent to 15 percent from what it is now," said Michael Karp, managing partner of executive search firm Options Group in Manhattan.

Talented professionals are also attracted to smaller firms like CastleOak because of opportunities for advancement, said Connie Thanasoulis-Cerrachio, a partner at SixFigureStart, a career coaching firm in Manhattan.

"They get to lead in a way they didn't before, because at the larger banks there were 20 other people just like them," said Thanasoulis-Cerrachio.

A partnership that CastleOak forged with investment bank Cantor Fitzgerald in 2006 has added to the young firm's credibility. CastleOak sublets space from Cantor and outsources many of its human-resources needs to the larger firm, and the association has enhanced the smaller firm's brand.

In exchange, Cantor has a financial stake in CastleOak, and that investment "has had a positive return for them," Jones said.

Nonetheless, CastleOak has experienced some growing pains. It was fined twice for regulatory "events" reported to the industry-funded regulator FINRA, both for failing to correct unmatched trades through TRACE, the Trade Reporting and Compliance Engine. The firm was fined $27,500 in July; in 2010 it was fined $12,500. Due to company policy, Jones could not comment on the issue.

Regardless, CastleOak has continued hiring aggressively, adding talent that Jones hopes will grow with the firm. "Those we hire get in on the ground floor. That doesn't happen much in finance, other than at small firms," he said.

Eilene Zimmerman writes for Crain's New York Business, a sister publication of Workforce Management. To comment, email

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