FBR & Co. has landed in the cross hairs of Voce Capital
Management LLC, a small activist hedge fund that has been privately
urging changes at the investment-banking firm.
Voce has recently built a 5.1% stake in FBR and in meetings with
the company's management has pushed for changes including the
liquidation of an investing division, people familiar with the
matter said. FBR, which is based in Arlington, Va., had a market
value of $176 million as of Thursday afternoon.
FBR officials didn't immediately respond to requests for
comment.
FBR generated revenue of $203 million last year, about half of
it from helping companies raise money through stock and bond
offerings. It's a big player in the market for private,
unregistered securities offerings known as 144As. The firm also has
smaller merger- and restructuring-advisory, brokerage and research
operations.
Among Voce's recommendations are that FBR unwind its
proprietary-investing division, which allocates more than $100
million to stocks, U.S. Treasuries and other assets. Much of that
money is parceled out to outside managers including hedge funds,
and last year the unit contributed about 10% of FBR's revenue, net
of interest expense, securities filings show.
FBR in 2007 was spun out of Friedman, Billings, Ramsey &
Co., then a nearly two-decade-old trading and research firm, and
went public the same year. Like many other financial firms, it
struggled during the recession, with its stock losing nearly 90% of
its value by early 2009. The shares have recovered only somewhat
since then.
Write to Liz Hoffman at liz.hoffman@wsj.com
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