SmallCap I-Banks: JMP JVs with China Firm; More

Posted On February 24, 2009 | by AllenCaron

San Francisco-based JMP Group Inc (NYSE: JMP, http://www.jmpg.com) announced this morning that it has signed an important joint venture with China Merchants Securities Co Ltd, one of China’s largest broker/dealers and investment banking firms.  The deal was put together by HuaMei Capital Co, which includes founders Adlai E Stevenson III and Leo Melamed (former chairman of the Chicago Merc). http://investor.jmpg.com/releasedetail.cfm?ReleaseID=367269

According to the JMP news release this morning, the newly signed partnership will seek to serve cross-border merger & acquisition and strategic advisory services.  In early trading, JMP shares responded with a gain of $0.10 to $4.60, vs a 52-week high of $8.12.  The current market cap is about $91 million, and trading on the NYSE is fairly light at an average of 25,000 shares per day.  Nonetheless, investors looking for innovative smallcap investment banks will probably want to look closely at this potential Pacific Rim powerhouse combination.  JMP also operates Harvest Capital Strategies (http://www.jmpam.com/), its asset management arm.

There are other smallcap investment banks that interested investors should be aware of — even as the giants teeter and stagger on a daily basis.  The smaller deals may be harder to get done these days, but a lot of small banks are putting their shoulders to the wheel and getting them done one way or another.

If you knew Boca Raton-based but NYC-housed vFinance as a public company, you probably know that it started as a VC-oriented website some years back, seeking to be a meetingplace for entrepreneurs and VCs.  From all indications the website has functioned well.  vFinance expanded by acquiring a broker/dealer and some smart investment bankers, and went public, trading for a while as VFIN.  Today vFinance is an arm of NYC-based National Holdings Corp (EBB: NHLD, http://www.nationalsecurities.com or http://www.vfinance.com).  NHLD is trading today at $0.65, down from a year-high of $2.80, for a market cap of just $10.7 million.

Today’s vFinance/National team is carving a niche for itself in greentech/cleantech, and seems to have an open line to important investors in the sector, including the camera-shy Quercus Trust.

Larger and increasingly diversifying beyond its old-boy energy industry roots, Houston-based Sanders Morris Harris Group Inc (Nasdaq: SMHG, http://www.smhg.net/), has a large and growing research operation, and new (and NYC-based) interests in areas like healthcare and cleantech.  With a market cap of about $105 million this morning, SMHG shares are about flat at $3.74, vs a year-high of $11.07, with average trading volumes of about 57,000 shares, a little anemic in dollars, but active enough to be able to find stock if you are interested.  It is possible that SMHG has seen some sympathetic downward pressure from the Stanford debacle (Stanford is also a Houstonian, but no relationship to SMHG).  Whatever the case, given their smart bankers, SMHG is worth a closer look. 

As always, we do not recommend stocks or strategies.  Please do your own diligence.

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