Institutional Brokerage

FBR Capital Markets has a highly effective, differentiated distribution capability based on long-standing relationships with a wide cross-section of institutional capital markets clients.  We believe our institutional brokerage professionals – one of the most knowledgeable sales teams in the industry – are distinguished by their in-depth understanding of the companies and industries on which we focus. Many of our institutional clients have been long-standing investors in transactions that we have brought to the capital markets and have continued to have a close relationship with us as they have grown in size and assets under management. 

Our early trading roots were with small hedge funds and other smaller, typically regional institutional accounts. Over the years, we served these clients well, earning their respect with a solid track record of success.  As a result, in addition to the top 50 institutional accounts which we and our competitors serve, we have the ability to communicate effectively with and distribute securities through a substantial network of mid-size institutional clients.

Our Sales & Trading group serves equity investors, delivering institutional sales and trading services, as of Decmeber 2008, to more than 700 institutional accounts in the United States, Canada, Europe, Australia and Asia. Our primary clients include mutual funds, hedge funds, money managers, endowments, foundations, banks, insurance companies and pension and profit-sharing plans.

In July 2008, the firm launched a convertible securities unit to broaden its product offerings and better serve small and mid-cap companies. FBR Capital Markets’ convertible securities team was founded by senior professionals from the former Bear Stearns’ convertible securities unit. The team originates, structures and trades equity-linked securities – including both convertibles and equity derivatives.

The Sales & Trading team works closely with FBR Capital Markets’ research analysts to provide the most up-to-date information to institutional clients. Our sales professionals rely on discussions with the research analysts at two or more daily sales meetings, as well as on the distribution of, and frequent updates to, research reports.

FBR Capital Markets brokers, traders and sales traders are, as of December 2008, market-makers or traders in more than 980 securities and provide independent research on more than 380 companies representing 22% of the S&P 500 by market capitalization.¹
 
In addition to agency trading in listed securities markets, we act as market-maker in NASDAQ and other over-the-counter securities. We rank as one of the largest distributors of the shares of small- and mid-cap companies in public and private securities offerings and have deep trading expertise in the eight vertical industry groups in which our Investment Banking and Research teams specialize. In a very competitive market environment, our trading volume has increased at a compound annual growth rate of 21.6% from 2003 through the 2008.

1) As of 12/31/08. Research is provided by FBR Capital Markets & Co.(FBRC) Research department, which is independent from the Investment Banking department of FBRC and has the sole authority to determine which companies receive research coverage and the recommendation contained in the coverage.  In the normal course of its business, FBRC seeks to perform investment banking and other fee generating services for companies that are the subject of FBRC research reports.  Research analysts are eligible to receive bonus compensation that is based on FBRC’s overall operating revenues, including revenues generated by FBRC’s Investment Banking department.  Specific information is contained in each research report concerning FBRC’s relationship with the company that is the subject of the report.
2) Compound Annual Growth Rate (CAGR) of customer equities trading.