Stephens Inc.

Last updated
Stephens
Company type Private company
Industry Investment banking
Founded1933
Founders W.R. Stephens
Jackson T. Stephens
Headquarters111 Center Street
Little Rock, Arkansas, U.S.
Number of employees
1200+
Website www.Stephens.com

Stephens Inc. is a privately held, independent financial services firm headquartered in Little Rock, Arkansas. [1] As one of the largest privately owned investment banks in the United States, [2] Stephens has 28 offices worldwide and employs more than 1,200 people. [3] Warren Stephens is chairman, president and chief executive officer of Stephens Inc.

Contents

Founding and early history

In 1933, Witt Stephens founded W.R. Stephens Investments to trade Arkansas Highway bonds, which at the time were selling for as low as pennies on the dollar. [4] By the time the bonds paid off at par in the early 1940s, Stephens had gained a reputation for municipal bond expertise and providing sound financial counseling. [4] In 1946, upon graduation from the U.S. Naval Academy, Jackson T. "Jack" Stephens joined his brother, and, with a handshake, the two brothers formed Stephens, Inc., and a partnership that lasted more than 45 years. [4] [5]

The two brothers quickly began a series of acquisitions that would become a catalyst for the firm's growth and future. In 1945, Stephens purchased Arkansas Oklahoma Gas Company in Fort Smith, Arkansas, and in 1953, acquired what is now Stephens Production, an independent oil and gas exploration company. [5] In 1954, they purchased a controlling interest in the Arkansas Louisiana Gas Company. [5]

In 1948, Stephens sold Sheridan Telephone Exchange to Allied Telephone Company, which later became Alltel, beginning a decades-long relationship that in part continues today. [4] [5]

In 1956, Jack Stephens was named president and CEO of Stephens Inc. and Witt left the firm to become president and chairman of Arkansas Louisiana Gas Company, while both retained their 50-50 share of Stephens Inc. Witt returned to Stephens in the early 1970s. [4] [5]

Jack began to grow Stephens by providing private equity to many young growing companies, much in the way of the British Merchant Bank investing model, predating by decades the private equity endeavors of Wall Street firms. [5] Jack's acumen as an investor was combined in remarkable fashion with his ability to form enduring personal relationships with his partners. [6] Several generations of companies and business leaders came to know Jack as not only a smart investment banker, but as a loyal and reliable friend as well. [6] Jack's influence grew well beyond Arkansas to the boardrooms of corporate America and to the halls of Washington D.C.; his opinions were constantly sought by investors, CEOs and politicians. [7]

Many of Stephens's private investments were quite successful. In the late 1960s, anticipating the coming revolution in bank data processing, Jack Stephens deployed excess computing capacity at Union Life Insurance Company, which was owned by him and his family. [4] With $400,000 in start-up capital invested, he created Systematics, which would later become a leader in the bank data processing industry. [5] Systematics was eventually acquired by Alltel Corporation and became Alltel Information Services. AIS was later acquired by Fidelity National Information Systems. [4] [5]

Another late 1960s investment was Purdue Airlines, which Stephens established (initially owning 80%) in partnership with Purdue University. Purdue Airlines operated DC-9 jet aircraft from 1969 through 1971. The carrier also operated Playboy Magazine founder Hugh Hefner's private jet, also a DC-9. The airline was liquidated in early 1971, with Southwest Airlines hiring the entire pilot corps to speed its launch later that year.

Wal-Mart

In 1970, Stephens Inc., along with White Weld & Co., raised $4.95 million in an IPO for a small Arkansas-based discount retailer, Wal-Mart Stores, Inc., owned by Sam Walton and his family. [5] The capital, and subsequently raised capital, helped to fund Wal-Mart's rise from $32 million in sales to the largest retailer in the world. [5]

Superdome

In 1971, Stephens Inc., together with First National Bank of Commerce, underwrote $113 million in tax-exempt bonds to help build the Louisiana Superdome. [5] At that time, this was among the largest single tax-exempt bond issues in history and Wall Street had turned it down. [4]

Worthen Bank

In 1983, the Stephens family invested in Worthen Banking Corporation, which was headquartered in Little Rock, Arkansas. [5] In 1985, Worthen's capital was wiped out by the bankruptcy of Bevil, Bressler & Schulman. [4] [5] A rights offering led by Jack Stephens was implemented allowing shareholders to provide the funds necessary to revitalize the bank and keep it solvent. [5] In 1994, Worthen was sold to Boatmen's Bancshares, and two years later, Boatmen's was sold to NationsBank, which in turn merged into Bank of America. [5]

1986–2000

In 1986, Warren Stephens, Jack's son, was named chief executive officer of Stephens Inc. [4] In 1989, Stephens advised Tyson Foods in its acquisition of Holly Farms, resulting in a $1.5 billion hostile takeover. [5] In 1992, Stephens invested in Viking Range Corporation, providing the growth capital needed to seriously expand the company into a leading national brand. [4] In 1993, Stephens purchased Donrey Media, renaming it Stephens Media Group. When sold in 2015, Stephens Media Group's properties include the Las Vegas Review-Journal and daily and weekly papers. [4] [5]

2001–present

In 2006, Warren Stephens acquired 100% of Stephens Inc. [4] [5] A little over a year later, the global economic crisis, triggered by the meltdown of the housing markets, severely impacted financial markets and posed a grave threat to all financial institutions. Having avoided the over leveraging that brought down other investment firms, Stephens remained sound and continued to grow during this period. [4] [5]

Since its acquisition by Warren, Stephens Inc. has grown substantially. The Public Finance Department has experienced a 47% growth, the Private Client Group has grown 66%, the Research Department has experienced a 71% growth, and Investment Banking has grown 95%. Stephens Insurance, an affiliate of Stephens Inc., has grown more than six times since the 2006 acquisition. [5]

Stephens Private Equity Group, known as Stephens Capital Partners, continued to find excellent opportunities in the 2000s as well. Three of their investments include the following:

Businesses

The Stephens building at night. It is one of the tallest in Little Rock. StephensIncLittleRockNight.jpg
The Stephens building at night. It is one of the tallest in Little Rock.

Related Research Articles

The Carlyle Group Inc. is an American multinational company with operations in private equity, alternative asset management and financial services. As of 2023, the company had $426 billion of assets under management.

Private equity (PE) is stock in a private company that does not offer stock to the general public. In the field of finance, private equity is offered instead to specialized investment funds and limited partnerships that take an active role in the management and structuring of the companies. In casual usage, "private equity" can refer to these investment firms, rather than the companies in which that they invest.

<span class="mw-page-title-main">TPG Inc.</span> American investment company

TPG Inc., previously known as Texas Pacific Group and TPG Capital, is an American private equity firm based in Fort Worth, Texas. TPG manages investment funds in growth capital, venture capital, public equity, and debt investments. The firm invests in a range of industries including consumer/retail, media and telecommunications, industrials, technology, travel, leisure, and health care. TPG became a public company in January 2022, trading on the NASDAQ under the ticker symbol “TPG”.

<span class="mw-page-title-main">CIBC Capital Markets</span> Investment banking subsidiary of the Canadian Imperial Bank of Commerce

CIBC Capital Markets is the investment banking subsidiary of the Canadian Imperial Bank of Commerce. The firm operates as an investment bank both in Canadian and global equity and debt capital markets. The firm provides a variety of financial services including equity and debt capital market products, mergers and acquisitions, global markets, merchant banking, and other investment banking advisory services.

TD Cowen, is an American multinational investment bank and financial services division of TD Securities that operates through two business segments: a broker-dealer and an investment management division.

Goldman Sachs Asset Management Private Equity is the private equity arm of Goldman Sachs, focused on leveraged buyout and growth capital investments globally. The group, which is based in New York City, was founded in 1986.

<span class="mw-page-title-main">Stifel</span> American investment bank

Stifel Financial Corp. is an American multinational independent investment bank and financial services company created under the Stifel name in July 1983 and listed on the New York Stock Exchange on November 24, 1986. Its predecessor company was founded in 1890 as the Altheimer and Rawlings Investment Company and is headquartered in downtown St. Louis, Missouri.

<span class="mw-page-title-main">History of private equity and venture capital</span>

The history of private equity, venture capital, and the development of these asset classes has occurred through a series of boom-and-bust cycles since the middle of the 20th century. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel, although interrelated tracks.

Jackson Thomas Stephens Sr was an oilman and investment banker. He was the CEO of Little Rock, Arkansas-based Stephens Inc., a privately owned financial services company.

<span class="mw-page-title-main">Early history of private equity</span>

The early history of private equity relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel although interrelated tracks.

<span class="mw-page-title-main">Private equity in the 1980s</span>

Private equity in the 1980s relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel although interrelated tracks.

<span class="mw-page-title-main">Private equity in the 1990s</span>

Private equity in the 1990s relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital, experienced growth along parallel although interrelated tracks.

<span class="mw-page-title-main">Private equity in the 2000s</span>

Private equity in the 2000s represents one of the major growth periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital expanded along parallel and interrelated tracks.

MidOcean Partners is a New York–based alternative asset management firm that specializes in mid-sized private equity and alternative leveraged investments.

<span class="mw-page-title-main">Friedman Fleischer & Lowe</span> American private equity firm

FFL Partners, LLC, previously known as Friedman Fleischer & Lowe, is an American private equity firm, founded in 1997 by Tully Friedman, Spencer Fleischer, David Lowe, and Christopher Masto. The firm makes investments primarily through leveraged buyouts and growth capital investments and is focused on investing in the U.S. middle-market.

One Equity Partners is a private equity firm with over $10 billion in assets under management which primarily deals with the industrial, healthcare and technology sectors in North America and Europe. One Equity Partners was the merchant banking arm of JPMorgan Chase, focused on leveraged buyout and growth capital investments in middle-market companies. Formed by Bank One in 2001, the group has offices in New York City, Chicago, Sao Paulo, Vienna, Hong Kong and Frankfurt.

Irving Place Capital, formerly known as Bear Stearns Merchant Banking (BSMB), is an American private equity firm focused on leveraged buyout and growth capital investments in middle-market companies in the industrial, packaging, consumer and retail industries. Based in New York City, it has total committed capital across its funds of $5.9 billion.

Ridgemont Equity Partners is a private equity firm focused on making investments in middle-market companies in the U.S. within certain industries such as basic industrial, energy, healthcare, telecommunications, media and technology. The firm focuses on equity investments up to US$250 million.

Warren Amerine Stephens is an American businessman. He is the chairman, president and chief executive officer (CEO) of Stephens Inc., a privately held investment bank. Stephens lives in Little Rock, Arkansas.

<span class="mw-page-title-main">PJT Partners</span> Global advisory-focused investment bank

PJT Partners, Inc. is a global advisory-focused investment bank, founded in October 2015 as part of The Blackstone Group's spin-off of its financial and strategic advisory services businesses. The firm was founded by Paul J Taubman after his 30-year tenure at Morgan Stanley, where he served as Global Head of Mergers and Acquisitions, Global Head of Investment Banking and until the end of 2012, Co-President of the Institutional Securities Group, which included Investment Banking as well as Sales and Trading.

References

  1. ↑ "Welcome to Stephens".
  2. ↑ "List of top 200 investment banks and boutiques". Equity-Research.com. 2017. Retrieved 2018-09-18.
  3. ↑ "Office Locations".
  4. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 "About Stephens Inc".
  5. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 "Stephens Inc". Encyclopedia of Arkansas.
  6. 1 2 Sheehan, Jack. "Jack Stephens: A Master Gentleman". Golf World. Retrieved 2013-12-26.
  7. ↑ "Funeral for Stephens Set for Wednesday". Arkansas Business.
  8. ↑ "The Firm". Hotchkis & Wiley.
  9. ↑ "Sexing".
  10. ↑ "About Halifax Media Group". Halifax Media Group.
  11. ↑ "Review-Journal, parent Stephens Media to be sold to New Media". Las Vegas Review-Journal.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.