Last of FBR's Founders to Retire as CEO

Billings Cedes Day-to-Day Control of Storied Firm's Investment Banking Unit

Eric F. Billings will retire as chief executive at FBR Capital Markets at the end of the year, closing a chapter in the history of a Washington business venture that made fortunes for its namesake founders only to struggle with subprime mortgages and other difficulties in recent years.

FBR Capital Markets President Richard J. Hendrix will succeed Billings effective Jan. 1, 2009, the firm's board announced yesterday, giving day-to-day control of the business to a non-founder for the first time since its inception two decades ago.

Billings, 56, will remain chairman of FBR Capital Markets and its senior affiliate, Friedman, Billings, Ramsey Group. FBR Group is the investment bank Billings and two others founded in 1989 in the unlikely environs of the District, 250 miles from Wall Street.

FBR Capital Markets is an outgrowth of FBR Group, which owns a majority of shares in the junior firm.

W. Russell Ramsey, a George Washington University alum and former Pitney Bowes salesman, left FBR Group in 2001. Emanuel J. Friedman, a former history teacher, resigned in 2005 after a Securities and Exchange Commission investigation into insider trading. There were no convictions or admissions of guilt, and the case of one person who fought the investigation was summarily dismissed. Friedman and some others at FBR paid fines. Ramsey and Friedman both operate investment firms in Northern Virginia.

Now, FBR Capital Markets -- with its asset management, investment research and brokerage arms -- is expected to carry on the future of the brand without Billings's direct involvement.

"I'm 56 years old, and it's a young man's game," Billings said yesterday. "This is the best thing for the company. It just expands the leverage ability of the firm, and it helps me get out and helps with client development and creativity and building the business. It gets me away from the day-to-day management, which I've been doing for a long time -- 18 years."

Hendrix, 43, said the company would continue a strategy he and Billings formulated more than a year ago.

"FBR Capital Markets has always been the essence of FBR and will continue to be -- from a client standpoint and from a banking standpoint -- the centerpiece of FBR," Hendrix said.

As one of the most highly compensated executives in the region, Billings, a University of Maryland graduate who once worked for Legg Mason, has a high profile in the Washington business, social and philanthropic worlds.

Boyish and handsome, with a floppy head of hair, Billings is known as much for heading his eponymous firm as for giving millions of dollars to Catholic causes. He was highly visible as the host of the FBR Open, the PGA Tour golf tournament that draws celebrities from politics, sports and industry.

FBR's three founders met when they worked together at Johnston, Lemon & Co., the century-old Washington brokerage where they bought and sold stocks for rich investors.