A boutique investment firm has facilitated nearly $1.5 billion in deals in barely two years. What’s its secret?
A banker and a lawyer walk into a bar … stop us if you’ve heard this one before … and launch a boutique investment banking firm.
That’s not exactly how Skyway Capital Markets was formed — but it's close. (The firm technically dates back to 2002, when securities attorney Marty Traber founded it, initially to work with two clients.) After being dormant for more than a decade, Traber and investment banker Roger Overby rekindled Skyway in early 2017.
Traber, 72, is the firm’s chairman and boasts more than 40 years of experience in securities law and capital finance. He says Skyway’s business model is fairly niche, especially for the Gulf Coast region.
“There are companies like us in South Florida,” he says, “but once you get out of there, there aren’t too many like us.”
Skyway, he says, focuses on raising capital for fast-growing, middle-market companies in a wide swath of industries — firms that might not appear on the radar screens of bigger rivals like Raymond James. Skyway CEO Russ Hunt is well known in financial services circles for his tenure at Atlantic Merchant Capital Advisors, when he helped foment Achieva Credit Union’s headline-grabbing purchase of Calusa Bank. He’s also the son of the late Dick Hunt, a highly respected fixture of the local investment and banking sector.
“If you didn’t like Dick Hunt, there is something wrong with you,” says Traber. “When Roger and I were putting this thing together, I said, ‘Russ, you are the most careful human being I know, and investment banking has its pitfalls. Would you be willing to join us and guide us?’ At first, it was on a part-time basis but now it seems like he works 150% of the time.”
“There are companies like us in South Florida, but once you get out of there, there aren’t too many like us.” Marty Traber, Skyway Capital Markets.
Others followed Hunt. Skyway’s team has grown to include nearly 15 investment bankers and he and Overby are engaged in talks that would see another small group come aboard. Traber expects the firm to have more than 20 employees, including administrative staff, by the end of the year. Skyway, he adds, has proven popular with mid-career professionals who want to make their mark at a smaller firm where they can maximize their impact and earnings.
“Aside from Roger and I, if you take a look at the average age of our bankers, most are in their 40s,” says Traber. “Some are pushing 50. The majority of them have a history with Raymond James Financial.”
One of the firm’s first hires, managing director Michael Faraone, is a Raymond James alumnus and helped recruit others. Faraone’s recruits, in turn, brought in people they knew, even from other cities like Atlanta and New York.
“I think the reason it works that way,” says Traber, “is because in investment banking, by the time you’re in your 40s, and let’s say you’re at a place like Raymond James Financial, you’ve already established a network of referral sources, so transactions will come to you. You’ve also already established the ability to source both debt and equity. So your need for a very large platform, especially in the lower-middle market and middle market, is null. You don’t need the overhead. It's very appealing to them to get a higher payout.”
Skyway seems to have hit on a winning formula with its mix of personnel transactions it targets. The firm, to date, has raised nearly $1.45 billion in capital for clients nationwide, and it’s even played a role in mergers and acquisitions involving household names like Symantec and Berkshire Hathaway. The company had $7.9 million in revenues in 2017, up slightly over 2016.
Skyway’s impact has been felt locally, as well: In July last year it helped Seminole-based First Home Bancorp Inc., parent company of First Home Bank, raise $9.42 million —exceeding the bank’s goal of $8 million. Other area companies Skyway has assisted include Creative Loafing, Vector Solutions and Harmony Healthcare.
Traber expects Skyway’s solid growth to continue, largely driven by fees related to non-bank lending debt, “which has mushroomed after the recession,” he says. Other sources of business stem from insurance companies leveraging debt and community banks in need of capital raises, Traber adds. “We have 34 entries in the pipeline,” he says.
Sounds like the sky is the limit.