Just weeks after a pair of former senior executives from Merrill Lynch & Co. bolted their investment banking environs to launch a new advisory and private equity practice, a quintet of investment professionals from Friedman, Billings Ramsey Group Inc. (FBR) have done essentially the same thing.
Named Milestone Merchant Partners LLC and formed in association with Taiwanese holding company Koo’s Group, the Washington-based firm will provide financial advisory services and operate a private equity partnership focused primarily on buyouts and recapitalizations.
“As investment bankers, we see situations that we would like to invest our own money in,” said Robert Hartheimer, a managing director with Milestone and former financial services banker with FBR. “The opportunity we’ve created will allow us to advise companies, find situations that are interesting to invest in and… actually create companies.”
Hartheimer added that he left FBR last May and that, at the time, he had no intention of starting up something like Milestone. Instead, he was working with a high-tech company in search of private financing when he and other FBR refugees decided to go into business together.
As such, the departures from FBR of Hartheimer, Eugene Weil, John Nelligan, J.Brandon Turner and Christie Morrissey-Smith do not seem to have any connection to the recent resignations of Hooks Johnston and Gene Riechers, both managing directors with FBR’s venture capital efforts. Moreover, neither man has made any public indications that he will join Milestone and, even if they did, they would likely need to wait out any sort of non-disclosure clauses contained within their FBR contracts.
Moreover, Milestone seems content to stay small for now. The private equity fund is primarily backed by $100 million from Koo’s Group, although new funds could sprout up as Hartheimer said the firm is in talks with a handful of other potential investors. It has not yet made any investments, although it does already have some advisory assignments.