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Stateside financial services firm arrives in Puerto Rico

Mesirow Financial launches into the local market with high expansion expectations


April 28, 2005
Copyright © 2005 CARIBBEAN BUSINESS. All Rights Reserved.

When Mesirow Financial CEO Jim Tyree explained his main interest in the Puerto Rico market, his answer was quite unique. The company didn’t decide to come to the island based on its demographic potential, or the future possibilities of the local economy, but rather on account of one person, Luis Villarejos.

"When I met Luis and learned of his background and capabilities, that became the major triggering piece. Then, I said, ‘wow, Puerto Rico is a great market for us, with great potential.’ Frankly, I could think the market was phenomenal, but without Luis, I would never go in, if that makes any sense," explained Tyree. Considering Villarejo has more than 20 years experience working in the financial industry for such companies as Arthur Anderson, Banco Popular Investment and Trust Divisions, Prudential, E.F. Hutton & Co., the Government Development Bank, Banco Santander, and, most recently, at Columbia Management Group, Tyree’s plan seems to make perfect sense.

Villarejo, who now is senior vice president of Mesirow Financial Puerto Rico and client service manager for Latin America, recently left Columbia Management along with his entire Chicago-based team to join Tyree and his operations. Mesirow Financial is the largest independent financial service firm in Chicago. The company has a total of 29 offices in 17 states, supported by more than 1,000 employees. The Puerto Rico operation is the first one to open outside of the mainland U.S. Mesirow’s total capital surpasses $140 million, and the company has $23.5 billion in assets under management. In fiscal 2004, revenues totaled $267 million. Those revenues are expected to surpass $300 million for the first quarter of 2005.

The main markets covered by the financial services firm are institutions and public sector entities, corporations, individuals, broker dealers, and investment advisers. The six main divisions covered are investment management, investment services, insurance services, investment banking, consulting, and real estate.

Tyree has been at the helm of the company for 15 years, and since then has tripled the size of the firm. His preferred method of expansion has proved to be acquisition deals. By acquiring two to four businesses a year, and venturing into a diversity of sectors, he has expanded the company from exclusively handling wealth management to the multiple businesses now under the Mesirow name. Tyree is interested in expanding the Puerto Rico operations through local acquisitions as well. "We look to continue acquiring and expanding in terms of client relationship opportunities, in terms of asset managers, and any other financial services we are in. We are counting on Luis to find other opportunities for other businesses in Puerto Rico in order to make other acquisitions," he confirmed.

Villarejo, who is currently the only representative of the company on the island, explains that in the mainland U.S., 100% of the clients transferred with the team from Columbia Management to Mesirow; and in Puerto Rico, 90% have transferred or have offered transfer commitments. Although he couldn’t offer details about his client list on the island, he did confirm that among them are universities, law firms, government agencies, banks, and international corporations. According to Villarejo, one of the strong selling points for clients is the team’s tenure working in the Puerto Rico market. The team’s previous employer, Columbia Management, formerly known as Stein Roe & Farnham, has had a presence on the island for more than 30 years.

Jim Kilbane, managing director of Consultant Relations and Client Services for Mesirow, believes there are great possibilities within the Puerto Rico market. "We view Puerto Rico as a good opportunity to purvey our investment product to client sponsors, endowments, foundations, and other interested parties," Kilbane pointed out, explaining that in the past the U.S. stock market has been a great benefactor of Puerto Rico wealth accumulation.

Elaborating on the commitment they have to island operations he added, "We know how important it is to have a presence locally in order to do business in Puerto Rico. It isn’t just about the connections. Part of our commitment to the island is to have Luis employed down there, bringing more visibility to our product and organization and to our continued support of philanthropic work." The company supports education and health programs and is ready to commit to other causes in local and stateside communities.

Recognizing the increasing importance of Hispanic communities on the U.S. mainland, Tyree explained that the company is also focused on developing products and services that meet the needs of this group. Steve Luetger, senior managing director, emphasized the important role Villarejo will be playing in that effort as well, "He has the skills of being bilingual and having a firm command of financial instruments, which will be vital to our expansion into Hispanic markets on the mainland."

Besides the overall success Mesirow Financial has had under his direction, one of the things Tyree is most proud of is how faithful his employees and clients have been to the company, "After 16 years as CEO, through about 45 acquisitions, no principal has ever left the company, and only six employees have quit working for me directly. What that means is very little turnover in clients."

The secret behind this kind of success is very simple, according to Tyree. "It all comes down to managing expectations with both employees and clients. Do what you say you are going to do. That means, no huff and puff, don’t promise what you can’t give, and then overachieve. That way, if there are any surprises, they are all good."

This Caribbean Business article appears courtesy of Casiano Communications.
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