Venerable UK stockbroker Seymour Pierce signed a “pre-pack” agreement with Cantor Fitzgerald last week, under which it went briefly into insolvency before transferring assets to Cantor. Cantor recently added equity research coverage in the U.S. and the rescue of Seymour Pierce gives it a small European research team. Details of the transaction were not provided.
Seymour Pierce was seeking a capital infusion from Ukrainian backers, which was blocked by the FSA. The firm was reportedly weakened by falling commissions and fewer small cap investment banking mandates. Seymour Pierce made a pre-tax loss of £587,000 in 2011 against a profit of £617,000 in 2010.
Cantor Fitzgerald began to build an equity research offering last year as it hired 15 analysts to cover around 150 stocks in four sectors. It also announced an exclusive distribution arrangement with S&P Capital IQ to offer S&P’s equity research to institutional investors. Prior to merging with Cantor, Seymour Pierce had 14 research analysts covering 10 sectors.