Guggenheim Capital Markets Tuesday said it was launching a new financial institutions group, to be led by a pair of former Bear Stearns executives.

The company, a unit of Guggenheim Partners, said managing directors Frank McCutchan and Scott Schondau will lead the effort.

The FIG outfit, to be based in Dallas, will provide investment banking services to community banks throughout the country, and will focus on providing financial consulting services to community banks on issues of regulatory capital and balance sheet structure.

The start of the new business would seem to be well-timed given the dislocation going on in credit markets and the likely sea change on the financial services regulatory front.

Many smaller banks are going to need to raise more capital or team up with healthier rivals, while others will simply find the competition from their larger brethren too fierce to remain independent.

“Given the dramatic shifts in the investment banking landscape, Guggenheim is well positioned for opportunistic growth,” said Ron Iervolino, head of GCM’s sales and trading desk. “We feel we can emerge as a new force in the space, providing community banks with unparalleled investment banking and financial consulting services."

McCutchan and Schondau have worked together for the past 10 years, focused on the community banking sector, with a specific emphasis on capital raising alternatives designed to optimize a bank’s regulatory capital structure.

Most recently, they were both managing directors at Bear Stearns, where they established the pooled trust preferred and subordinated debt program and headed the origination platform out of Dallas.

During the past seven years at Bear, McCutchan and Schondau were directly responsible for originating over $2.3 billion of capital securities.


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