Jim Reynolds Jr. founded Loop Capital in 1997 as an investment bank specializing in bond sales for municipalities. Ten years later, with thirteen offices and nearly 100 workers, Loop Capital was a national company and had brokered more than $800 billion of underwritings in equity, tax-exempt, and taxable fixed income markets. In the process of building its municipal finance and equity trading companies, Loop Capital had developed close relationships with a number of corporate executives, big institutional money managers, and government officials.
These customers started asking Loop Capital for help with other financial services, leading the company to build corporate finance, tax-exempt, and taxable fixed income platforms so it could offer a broader array of investment services. Equity, taxable as well as municipal and corporate finance, and tax-exempt trading were creating positive cash flow. In an area where failures were not infrequent, Loop Capital was booming, and Reynolds viewed great but untapped potential in the future of the business. Now he confronted several intriguing questions: Should he launch a $700 million infrastructure fund to put money into the kinds of deals the company had helped construction? Did it make sense to invest in order to staff, marketplace, and support the startup of this new fund? If the fund was established, should Loop Capital invest to the 1% investment likely to be required as the general partner of the fund?
PUBLICATION DATE: October 01, 2010 PRODUCT #: KEL494-PDF-ENG
This is just an excerpt. This case is about INNOVATION & ENTREPRENEURSHIP
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