Phila investment bank hires analysts, seeks Internet, digital, REIT deals

Boenning & Scattergood, the century-old, West Conshohocken-based investment banking-trading-brokerage firm active in Pa. and Ohio municipal, bank and utility finance and investment, is doubling its small research analyst staff and adding coverage of real estate and Internet-and-media stocks.

Murali (MOR-ley) Sankar, a Brooklyn-based analylst specializing in digital advertising and other media and Internet stocks, has signed on with Boenning after a brief stint at Janney Capital Markets earlier this year, confirms Michael Galantino, who runs Boenning's private clients group and serves on its capital markets committee. Sankar was previously a buy-side analyst at JPMorgan Asset Management.

"We continue expanding" the services of Boenning's capital markets group, research director Matt Schultheis said in a statement. Sankar has an MBA from the U of Michigan and an MS from Delft University of Technology in the Netherlands. He joins utilities analyst Ryan Connor and Schultheis, a veteran bank analyst, at Boenning. The move comes four years after the firm reversed a more-ambitious expansion by laying off pharma, retail and tech-investment analysts hired in 2008 when deals dried up.

Later this fall, Boenning plans to announce another new analyst who will cover real estate investment trusts (REIT), like Philadelphia-based mall-owner PREIT and Radnor-based office and apartment developer Brandywine Realty Trust.

Boenning has prospered by triaging markets -- and pulling out when there's little business to be done. "Our muni bond business is killing it," and Boenning has booked 65 Pennsylvania municipal-finance deals so far this year, plus 100 last year, Galantino told me. "We're a conservative, income-oriented firm," which has expanded offices in New York, Cleveland, Columbus and Pittsburgh in recent years.

The firm isn't large enough to afford "big bets" that risk $10 million or more in capital, Wall Street-style, Galantino acknowledges. "Our bread and butter is the private-client group and high net worth servicing. Our clients want income, we deliver tax-free income in public finance, like the $20 million Radnor Township bond sale," that may be too small for a bigger house like Janney or Citi, "which are doing the $300 million airport deal," Galantino says.

But Boenning is specialized enough that insurance dealmaker Anthony Latini helped the firm land a small piece of Ace Ltd.'s giant Chubb acquisition financing.

Several of Boenning's speciality businesses, acquired in a string of deals and liftouts over the past generation by principal Harold Scattergood and his team, have proved sustainably profitable, Galantino adds. "We make markets in 280 banks. We know the CEOs and where their kids go to college. When they are ready to move on they call us." Boenning has shared financing of Jay Sidhu's ambitious Customers Bank debt with Janney, for example.

Why REITs? "Look at PREIT. We love the company, we love Joe Coradino, we want to get into that space," Galantio says, of the Philadelphia-based mall owner and its CEO.

But isn't PREIT trading below its book value? That's part of the attraction, Galantino added: "If they get rid of a couple more of their C-rated malls and get going on the Gallery, the value should go a lot higher," he said, referencing the long-delayed, taxpayer-subsidized, Macerich Co.-assisted Center City mall redevelopment proposal. 

And the Internet? "Our institituonal sales guys and clients have continually inquired about tech research," Galantino says. "This is like Joker's Wild," with so many variables, opportunities, warnings. Sankar, he says, is the man for that job. He'll focus initially on Internet service providers and media advertising.