Black Investment Bank Lands a Billion-Dollar Contract

By Black Voices On Money on 06/08/2010 – 7:10 am PDT

In a historic deal, M.R. Beal & Co, a black-owned investment bank, was announced to be the senior manager and sole book runner for the $1.3 billion Personal Income Tax (PIT) bond issuance of the Dormitory Authority of the State of New York (DASNY).

This is the largest lead underwriting deal given to a minority-owned investment bank in the history of New York.

“It’s really historical in the sense that this is the first time in the finance capital of the world that we’ve had an MWBE firm really be a true senior lead banker and sole book runner on a deal of this magnitude,” said Paul T. Williams Jr., DASNY’s president. “To have an MWBE firm in the lead demonstrates — not just to folks here in New York but across the country — that these firms have arrived.”

The deal will involve tax-exempt and taxable bonds used to fund the State University of New York educational facilities. The contract is significant for minorities in the financial services industry, where African Americans are not very well represented. According to the 2007 Securities Industry and Financial Markets Association Diversity Practices report, 5 percent of all financial services employees are African American. However, most of the employees are part of the administrative staff, making up 11 percent of the total. Only 1.4 percent of all managing directors are African American.

As a finance professor, I’ve seen the lack of diversity in this industry up close. Even within the field of academic finance, black scholars are incredibly rare, and African Americans are unable to obtain admission to Ph.D. programs. I was the only African American in the country to get a Ph.D. in finance during the year 2002, which was a shock to me. I would not argue that my feat was due to any type of extraordinary intelligence on my part. Instead, it was due to the institutional barriers I’d seen shutting out other black people along the way.

One thing that African Americans must learn is that an understanding of money and finance can go a long way toward liberating our community from the crushing weight of racism. America is a historically racist country, but with economic power comes social power. Our ability to build our own destiny lies within our understanding of the keys to financial freedom.

Dr. Boyce Watkins is the founder of the Your Black World Coalition and a Scholarship in Action resident of the Institute for Black Public Policy.

From FAVSTOCKS published on June 8, 2010