BNY Brokerage Acquires Capital Resource Financial Services

March 17, 2003 ( - BNY Brokerage Inc. has agreed to buy Capital Resource Financial Services (CRFS), a Chicago-based transition management and commission recapture firm.

According to announcements from both companies, BNY Plan Services will service CRFS clients – pension plan sponsors and investment managers. BNY Plan Services is a division of BNY Brokerage providing transition management and commission recapture. BNY Brokerage Inc. is part of BNY Securities Group, the Bank of New York’s institutional agency brokerage and correspondent clearing division.

CRFS is owned by Capital Resource Holdings, Inc., the holding company parent of investment consultant CRA RogersCasey.

CRFS President Shauna Lambright will join BNY Brokerage as senior vice president of BNY Plan Services and will continue to be responsible for business development and client relations for the CRFS client base.

Terms of the deal were not disclosed.

The deal raises two interesting points. First, it is further evidence of the considerable ambitions that the Bank of New York – through its BNY Securities Group – is evidencing in the institutional trading arena. Already one of the largest agency brokers in the world, BNY has, through a clutch of acquisitions over the last five years, made itself a player of note in the commission recapture, soft dollar and transition management businesses – once focused on servicing asset managers and broker/dealers, BNY now has real heft in the plan sponsor community.

Second, the decision by Capital Resource Holding’s Kevin Greene to shed the firm’s brokerage arm indicates that Greene, for one, believes that he will be better served in his ambitions to build up an industry-leading independent investment consultant without the accompanying baggage that a wholly-owned brokerage subsidiary drags in its wake. A handful of consultants have already gone that route – notably Callan Associates, which sold its broker/dealer subsidiary, Alpha Management, also to BNY in November 1998. But many still retain broker/dealer subsidiaries and have thus far been able to assure clients that such an operation raises no conflict-of-interest issues.