When it comes to navigating the rocky shoals of the securities markets to make the best deals, major corporations are seeking out Toussaint Capital Partners L.L.C., a Wall Street investment banking boutique headed by Avery F. Byrd Sr., chairman and CEO, and Paul T. Williams Jr., president.
Founded in 2003 and serving institutional clients, Toussaint handles value investments with a specialty in debt and equity trading and some municipal underwriting. Clients include Ford Motor Co., General Motors Corp., Citigroup, DaimlerChrysler AG and Freddie Mac, one of several loan-financing agencies at the center of the subprime mortgage lending meltdown that is roiling capital markets worldwide.
In an environment fraught with tension and uncertainty, Byrd, who boasts 20 years of Wall Street experience, keeps a cool head, relishing the challenge of finding quality trades. “I like stepping through the eye of the storm and finding value. The market will digest failure,” he says.
Williams, a veteran attorney, has helped steer the company since its inception. It is he who laid the groundwork for its high ethical standards and commitment to following regulations. The two men spoke in a wide-ranging interview with The Network Journal at their Wall Street offices near the South Street Seaport in New York City.
Meeting of the Minds A St. Louis native, Byrd thanks his grandfather, James Walker, for developing his self-described “keen sense and interest in investments.” Walker, who was a foreman at Monsanto Co., taught him to save 15 percent to 20 percent of every dollar.
When Byrd was 12 years old, his grandfather opened a $15,000 account for him but would not allow him to touch the cash. Instead, he told Byrd to use the money for investing. As an allowance, Byrd received a percentage of the return on his investment. “It took me two to three months to figure out what he was talking about,” he says. “I started reading magazines like Barron’s and Value Line,” citing prominent publications in the investment world. Byrd went on to invest in gold stocks.
Byrd graduated from Morehouse College in Atlanta with a bachelor’s degree in finance and began his career in brokerage as an intern at Lehman Bros. He continued to earn his stripes at several large financial and investment firms, including Chemical Bank, Dean Witter Reynolds and Morgan Stanley, as well as at smaller minority-owned boutiques, such as The Williams Capital Group L.P.
Moving from a major firm to a smaller minority-owned business, “was nothing short of culture shock,” Byrd says. “I literally walked around the block 10 times trying to talk myself out of not going in.” It proved the best move of his professional life. “I consider myself a manager and a visionary. I don’t think I would ever have had the opportunity to implement and execute some of things I’m doing now if I had stayed at larger firms,” he says.
He met his future partner, Paul T. Williams, through a lawyer friend. Several discussions later, he knew he had found a partner who could help build capital for the venture he had already formed. “You generate more personal income through smaller firms,” says Byrd. “I brought a core set of customers and relationships. I came [to Toussaint Capital] with a sense that I was bringing those relationships to smaller platforms. I could go after some accounts.”
A graduate of Columbia University Law School, Williams began his career in New York’s political arena, working with officials such as former N.Y.C. Mayor David Dinkins. He once served as counsel for the New York State Assembly, where he gained valuable experience handling public financing and issues involving minority-owned firms. He subsequently branched out to private-sector legal syndicates, later becoming a partner at Bryan Cave L.L.C., an international law firm.
But Wall Street soon beckoned. “I thought about moving on to the business side of the ledger,” says Williams. In Byrd he saw a competent CEO who could build a successful firm. That observation was a key factor in his decision to invest in Toussaint.
Value-added Quality Byrd attributes Toussaint’s success to its ability to establish long-standing relationships with clients and investors. “We’re able to afford them 15 to 18 years of experience. Other firms come and go. We’re in it for the long haul,” he says.
Toussaint Capital Partners has 12 to 15 employees. The firm makes a big deal of its commitment to a value-added approach to client relationships. Byrd and Williams tout such practices as swapping ideas, trade anonymity and tireless work in meeting client objectives and responding to their concerns. “We keep people focused on the value products we offer. We try not to get involved in the trade of the day,” Byrd says. “We’re only as successful as our last execution. We’re successful because we have to be successful.”
Those principles are helping the company to weather the storm that erupted after the downturn in the housing market. The worst of the storm is yet to come, Williams predicts. “We’re going through a crisis [but] we’re managing through the crisis. However, for the long-term market, I don’t think we’ve seen the bottom yet,” he says.
Keys to Success Toussaint’s founders structured the company to appeal to large corporations. Its ability to woo and maintain such relationships with these institutions has been a major ingredient in the firm’s success. Other key factors are a track record of successful investment performance and a commitment to transparency in its financial dealings.
“It is the ability to have effective execution of their securities and duplicate it consistently,” says Byrd. “We have clean financials, clean compliance records. We provide an ability for due diligence to be done.”
It helps, too, to be “entrepreneurial with attitude, vision and heart,” Williams adds. To this, Byrd adds hard work and an unwavering commitment to being the best in his niche. Aspiring investors must have the desire and ability to participate in the “freight” of the daily marketplace, he says. “You have to be consistent. You have to plan your work and work your plan,” he says.
Relationships matter. Toussaint, for example, receives valuable support from Pershing L.L.C., the renowned Bank of New York clearing subsidiary, which it uses to handle its client funds and clear trades. The firm owes its relationship with Pershing to a neighbor of Byrd’s who was a Pershing employee at the time.
“He was one of the first persons I went to [when starting the firm],” says Byrd. “[The relationship] offered us a source of legitimacy.”
Neither Byrd nor Williams sees Toussaint as being in competition with other minority-owned firms on the street. Instead, they see the market itself as their chief rival. And, while they would like to duplicate the success and impact of established leaders like Goldman Sachs, they prefer the more personal dynamic associated with being a smaller company.
“We like being lean, small and nimble,” says Williams. “We opportunistically look for strategic additions to the firm.”
Helping Others Williams and Byrd make time to share their knowledge and resources with those within and outside of Toussaint. Williams, for example, is involved in several mentoring activities for youngsters, such as the Ego Academy in Brooklyn, N.Y. “We have too much experience to not send the ladder back down to help someone else,” he says.
Byrd volunteers at Promise Outreach, a Catholic ministry for youth in Lodi, N.J. A devout Catholic, he was introduced to the program and other charitable activities by a close personal and spiritual adviser, Brother Thomas Corey. Corey also is a member of Toussaint’s advisory board. Byrd is determined to keep Toussaint in a position strong enough to be able to recruit young talent that larger houses may overlook. “We constantly make sure the platform is here. We use that as motivation to do more,” he says.
Citing benefits they themselves gleaned from being mentored, both men say they are committed to sharing knowledge with Toussaint employees. “I had a mentor tell me if you want to be successful in this business you can’t be running home to see Monday night football,” Byrd says.
By Maurice Boyer