Eighteen years after founding and running a specialty fixed-income banking boutique, John Utendahl has joined Deutsche Bank as a vice chairman.
The move runs counter to the wave of dealmakers leaving large firms and hanging out their own shingle. But, for the founder of Utendahl Capital Partners the new role at the German banking firm is part of an effort to broaden his horizons.
“No matter what Utendahl [Capital Partners] offered, it did not have any of the resources to even speak of that Deutsche Bank has,” said Utendahl, 52. “It had its limitations.”
Utendahl will be based in New York. He will be part of the office of the CEO of Deutsche Bank Americas, Seth Waugh. It is a role that will have Utendahl working as a liaison between Deutsche Bank's dealmakers and client company CEOs. He will also cultivate new clients.
Utendahl has 30 years of experience on Wall Street. After completing studies at Columbia University’s graduate school of business in 1982, he became a bond trader at Salomon Brothers, where he specialized in utility and telephone company issues.
This was an era at Salomon which had Lewis Ranieri running the mortgage bond desk – in fact, Ranieri got his start on the utilities desk – and it was here that Utendahl first met Waugh. (The two have since stayed in touch and work together on a New York charity.)
After Salomon, Utendahl was desk manager in Merrill Lynch’s corporate bond department. In 1992, Utendahl founded his own firm, which specialized in taxable fixed income markets, making it a novelty among minority owned firms; until then most minority owned firms on Wall Street specialized in municipal bonds. Utendahl recalled that his startup firm was very active with the asset dispositions – much of it real estate debt – conducted by the Resolution Trust Corp.
Eventually Utendahl Capital expanded and built up an asset management arm. Utendahl merged with Williams Co. last year.
Utendahl may have shifted to a larger banking firm, but he is not dismissive of other professionals’ attempts to open up their own specialty boutique firms. “I don’t want to discourage entrepreneurship in the financial services business. There is always going to be some room for niche players,” he said.
Meanwhile, Utendahl hinted at another reason why he joined Deutsche Bank and why other professionals running niche banking firms may face tougher market conditions.
Yield premiums for a wide range of bonds have narrowed since the worst of the financial crisis; at the same time bid-offered spreads on a wide range of bonds have narrowed, making it tougher to generate a profit as a market maker.
“The number-one thing I look at is: ‘where is the volatility?’ In the last 18 months there was a great opportunity for boutiques to ... reassess their situation and put themselves in a position where they can manufacture a service, if not a product, that would be attractive to institutional clients,” said Utendahl. "But as with every good thing, it comes to an end. The opportunity going forward is probably going to be a little tougher.”