VACE Partners, a Mexican investment banking boutique with historic links to Salomon Brothers, has forged a cross-border alliance with a New York-based start-up that is looking to bring back the legendary Wall Street brand. It is the first step towards the creation of a global network of investment banks, the new Salomon Brothers said.
"What initially caught our interest was, being Salomon alumni, the possibility of reviving the brand and reviving the bank," said Carlos Vara, who co-founded VACE Partners in 2009 along with several former members of the Mexico and Latin America investment banking team he led at Citigroup until late 2008. The group had previously done business under the banners of Salomon Brothers and Salomon Smith Barney, undergoing rebrands with successive acquisitions.
Since striking out as an independent company, VACE Partners has become well established as a national M&A adviser in Mexico, with clients including listed investment holding company Grupo Gigante and tequila maker Jose Cuervo.
In the alliance with Salomon, the firm sees an opportunity to add to its international capabilities and win more cross-border business. Under the terms of the agreement, Salomon Brothers must involve VACE in any cross-border deals involving Mexico and vice versa for deals involving the US, said Vara, who added that talks are under way for three potential transactions.
VACE also sees value in the famous brand name, although the Mexican firm has not yet decided whether to undergo a full rebrand.
"It's a possibility," said Vara. "We decided to start with this alliance and work with these obligations [...] for a year and, after a year, make a decision on whether we want to rebrand or not."
The new Salomon Brothers, which is also known as Salomon Encore, says it is a privately held, independent investment bank. The legal successor to the original Salomon Brothers entities is Citi, but Citi no longer uses the name and has let its intellectual property rights lapse. The new Salomon Brothers is not affiliated with Citi.
The startup's main claims to the brand’s heritage stem from its ownership of the Salomon Brothers trademark in the US and the involvement of former Salomon Brothers bankers, particularly on its advisory board, which includes FIG investment banking veteran Alan Ginsberg, according to its website.
Although it purports to offer services such as equity and debt capital raising and private company M&A, the new Salomon Brothers and its broker-dealer affiliate Salomon Brothers Securities are not yet registered with Finra, which limits the scope of activities in the US. Nevertheless, the firm has begun to build a research department, hiring former MUFG energy industry analyst Michael McAllister as head of equity research, according to a recent announcement.
The new Salomon Brothers is led by Adam Smith, a serial entrepreneur who was an analyst at the original Salomon Brothers in the mid-1990s. The Salomon Brothers trademark held by his company was registered with the US Patent and Trademark Office in March 2020 by a company called Dominant Brands. It was reassigned to Smith’s firm in June 2020.
Dominant Brands has registered several heritage financial services trademarks, including First Boston. Credit Suisse, the legal successor to the original First Boston, struck a deal with the holder of that trademark late last year as part of its plan to revive the Credit Suisse First Boston brand. That plan is now in tatters after Credit Suisse was acquired in a rescue deal by rival UBS.