The names behind Arlington investment bank Friedman, Billings Ramsey Group Inc. have kicked themselves upstairs, giving up daily operations of the company to do more big-picture thinking.
Emanuel J. "Manny" Friedman, Eric F. Billings and W. Russell Ramsey, who together founded FBR in 1989, will make up the new office of the chief executive, turning over the company's operational reins to Robert S. Smith, FBR's general counsel and executive vice president. Smith, 40, will take the new title of chief operating officer of the 400-person company.
"The principal plan is to take the day-to-day responsibilities off Manny, Russ and Eric's shoulders," Smith said.
As the investment banking landscape is changing and becoming increasingly competitive, especially with the new entry of online brokerages and skyrocketing Internet public offerings, the founders wanted to spend more time thinking about the future of FBR a few years out.
"We would like to expand dramatically the amount of private equity we have under management and increase our strategic partnerships," said Friedman, explaining the executives' two largest goals.
The first specific area of concentration for the troika will be an expansion of FBR's venture-capital pools across the country and in some international locations. FBR is planning to launch new venture funds next year that will operate in Charlotte, Los Angeles and London and invest in early-stage technology companies, Friedman said.
FBR now runs two technology venture funds in the Washington area that manage a total of $200 million. The tech funds have been particularly successful for FBR, with four of its portfolio companies--Proxicom Inc., LifeMinders.com, CareerBuilder.com and Network Access Solutions--going public so far and two--webMethods Inc. and VarsityBooks.com--in registration.
"The technology part of this business is running at 150 miles an hour," Friedman said.
While Friedman said the main reason to establish new technology venture funds is that they are now reaping great returns, he also said they can help build an early relationship with a start-up that may someday need a firm to underwrite its public offering.
Of the four now-public companies in which FBR venture funds have invested, the company was an underwriter in two--Proxicom and CareerBuilder--of their IPOs. It will be an underwriter in the webMethods and VarsityBooks.com deals.
Earlier this year FBR launched FBR.com, a site that sells public offerings and provides investment services and information online. So far it has done 25 online offerings.
"It's an important part, but still a small part," Friedman said.
In their new roles the three will continue to build FBR.com and also concentrate on forming more alliances like the one they have with Fidelity Investments, in which FBR sells initial public offerings of stock through Fidelity's retail discount brokerage network.