The minority-owned investment bank Kaufman has closed its operations, according to earlier information on the company’s website, which is now also disabled. Kaufman Bros. LP, based in New York and with offices in San Francisco, was founded in 1995 as an investment banking and advisory firm, as well as a broker-dealer. Claiming itself as the largest minority-owned and operated investment bank in the U.S., Kaufman helped raise $50 billion in capital since 1999 for corporate clients in technology, media, telecommunications, green technology and health care industries. As part of the diversity efforts, the firm was asked to participate in underwriting equity offerings for Citigroup and AIG after the financial crisis.
Kaufman employed about 40 people at the time of its close. As of December 31, 2010, the company’s assets stood at $3.26 million, while partners’ capital showed a balance of $1.21 million. Small firms like Kaufman have been under financial pressures as dealmaking and trading opportunities shrink amid continued concerns about the European debt crisis. According to a January 27, 2012 statement by Standard & Poor’s, investment banks and broker-dealers “are likely to face a prolonged period of low profitability and possibly other financial pressures because of ongoing weakness” in the world economy.
Following Kaufman’s close, regulators have yet to carry out actions in their responses. The Financial Industry Regulatory Authority will need to delist Kaufman as an active broker-dealer from the regulator’s website. The Securities Investor Protection Corporation may step in at some point to oversee the unwinding of the firm’s assets for the recovering of any loss of client assets.
Read more at Bloomberg BusinessWeek.