Bache & Co.

Bache & Co.
Industry Investment banking
Fate Acquired by Prudential Financial in 1981 to form Prudential-Bache Securities, later Prudential Securities Acquired by Jefferies Group, Inc. in July 2011
Predecessor Leopold Cahn & Co.
J.S. Bache & Co.
Successor Prudential-Bache Securities
Founded 1879
Founder Jules Bache
Headquarters New York, New York
Products Financial services
Parent

[[Bache & Co. Merchant Bankers 1992-Present]]

Jefferies Group, Inc (2011 -2015) Prudential Financial (1981-1991)
Subsidiaries Major Acquisitions:Halsey, Stuart & Co.

Bache & Company (later known as Bache Halsey Stuart Shields Incorporated) was a securities firm that provided stock brokerage and investment banking services. The firm, which was founded in 1879, was based in New York, New York.

In 1981, Bache was acquired by Prudential Financial to form Prudential-Bache Securities. In 1991, the usage of the Bache name was discontinued and the firm was renamed Prudential Securities, a predecessor of the investment banking operation of Wells Fargo, via its acquisition of Wachovia Securities.

Prudential Financial retained the commodities and financial derivatives businesses, keeping them separate from the joint venture. In 2003, the firm resurrected the Bache name, creating Prudential Bache. In July 2011, Bache was acquired by Jefferies Group, Inc for $430 million and was renamed Jefferies Bache.

As of 2016, only the Merchant Banking Division of Bache & Co. utilizes the Bache name, headed by L. Edward Bache Sr., Managing Director, the firm is based in Crystal Beach, Florida.

The firm trades for its own accounts, primarily in precious metals and rare coins, but also provides venture capital and loans to emerging growth companies.

History

Founding and early history

Jules S. Bache, founder of Bache & Co.

The firm traces its roots back to 1879 with the founding of Leopold Cahn & Co., a brokerage and investment bank.[1] In 1892, Jules S. Bache, an employee and nephew of Leopold Cahn, reorganized Leopold Cahn & Co. as J.S. Bache & Co. Jules Bache was the grandson of an officer who fought under Napoleon and collected art treasures for The Louvre. Over a fifty-year career, he built the company into one of the most successful and innovative brokerage houses in the United States.

In 1890, the firm expanded to open a second office in New York City and a branch office in Albany, the first branch established by any brokerage firm with a direct wire link to headquarters. Among the early clients of J.S. Bache & Co. were such renowned financial leaders as John D. Rockefeller Sr., Edward H. Harriman, and Jay Gould.

In the tumultuous markets brought on by the Panic of 1907, Bache handled as many as 200,000 shares a day. The firm had by now established itself as a leader in commodities trading.

During the 1920s, the firm became a leader in financing railroads, automobile and mining enterprises. It headed the list of stockholders of the Chicago, Great Western Railway, and acquired control of the Ann Arbor Railroad. The firm was closely identified with the founding and early growth of the Chrysler Corporation.

Bache demonstrated that it would remain a major presence on Wall Street in the Crash of 1929 by reducing the credit extended to the firm's customers and warning them of the possibility of a reversal. Fortuitously, the firm had none of its own capital invested in the stock market and had no investment trusts to protect during the markets decline. In the dark days of the Bank Holiday in 1933, when cash was virtually unavailable, Bache attracted national attention by supplying currency to customers in New York, Detroit, and other cities.

World War II forced the closing of all of Bache's overseas offices except for the London office, which remained open throughout the conflict. The firm was among the first to employ women to fill jobs vacated by male employees in the military services. During the war, Bache also introduces the first employee profit-sharing plan in Wall Street history.

1944–1981

Bache & Co. logo, ca. 1959
Bache logo, ca. 1969

Following the death of Jules Bache in 1944, his nephew, Harold L. Bache, took over the running of the business and the name was shortened to Bache & Company. The New York Herald printed "The late Jules Bache will be appreciatively remembered in the financial and business worlds. In both he was a distinguished figure, a man of great acumen and sterling integrity."

The firm was the first to explore investments in Japan following the war, and one of its early postwar enterprises was the formation of the highly successful Japan Fund, a mutual fund composed exclusively of Japanese securities. In the 1950s, the firm pioneered American stock brokerage expansion abroad.

In the mid 60's Bache & Co. was the 2nd largest retail brokerage company in the US (and probably the world) after Merill Lynch, but like Merill struggled to make the "top bracket" of wholesale investment banking firms (e.g. Morgan Stalnely, First Boston, Goldman Sachs, etc.,). Harold Bache still came into the office at 36 Wall Street daily, through the private elevator on the street, and attended weekly due diligence meetings in a stuffy room in the middle of the building, possibly designed to minimize these necessarily boring sessions. Bache's Research Department then included a range spanning Charlie Tatham, a patrician utility analyst and poet who co-authored "Graham and Dodd" and a street fighter from Brooklyn named Harvey Milk, who managed a bullpen of wannabe analysts in 1965 before he was shipped off to Dallas the next year for reasons not understood until later, when he became the "Mayor of Castro Street" in San Francisco.

In 1971, Bache & Company became the second major brokerage firm to go public. In 1974, Bache acquired Halsey, Stuart & Co., a Chicago-based investment banking firm founded by Harold L. Stuart in 1911. The firm's expansion in the 1970s was enhanced by its acquisition of Shields Model Roland.[2] Originally known as Shields & Co., the firm was founded by Paul Shields and merged with Model, Roland & Stone, founded by Leoo Model shortly after World War II.[3]

As the Bache Group celebrated its centennial in 1979, it had $151 million in capital, some 10,000 shareholders, over 6,500 employees including 2,500 account executives. It was involved in practically every facet of the securities business. Its principal operating subsidiary, Bache Halsey Stuart Shields Incorporated, had memberships on 59 different securities, commodities and options exchanges in the United States, Canada and overseas. It maintained 176 offices in 143 cities in 11 countries as well as the Virgin Islands and Puerto Rico, operated a worldwide communications system that carried more than 50,000 words of financial information daily over 100,000 miles of private wire, and served several hundred thousand clients ranging from individuals with modest sums to invest to large pension funds, insurance companies and other institutional investors.

Acquisition by Prudential Financial

Prudential-Bache logo, ca. 1984

In 1981 Bache, then known as Bache Halsey Stuart Shields Incorporated, was acquired by Prudential Financial for $385 million. Prudential dropped the usage of the Bache name in 1991, renaming the division Prudential Securities. Later, in 2003, the retail brokerage was combined with that of Wachovia Corporation's to create Wachovia Securities[4]

Prudential retained the commodities and financial derivatives following the joint venture with Wachovia. Though the two business did not use the Bache name, Prudential Financial rebranded the two units in 2003 under the Bache name, creating Prudential Bache.[5]

Acquisition by Jefferies

In 2011, Prudential Bache was acquired by Jefferies Group, Inc from Prudential for $430 million.[6] Bache was re-branded Jefferies Bache and forms the foreign exchange, commodities and listed derivatives division of Jefferies Group, Inc. Jefferies Bache has over 400 employees and operates out of 5 offices around the world.

Sold by Jefferies - Continued Operatiions

Jefferies discontinued the use of name April 8, 2015, selling its commodities trading business.

Bache & Co. continues to operate a Mortgage Securitization, Venture Capital, Numismatics, Precious Metal and Big Data Commodities Arbitrage (@BacheUSA) Trading operation, as well as owns and operates approximately 100 web sites based out of Crystal Beach, Florida. Today Bache & Co. holds approximately $100 Million in Assets in physical commodities, Numismatics and has holdings in internet, and publicly traded companies that include or have included Tidalwave, First American, Dallas Gold & Silver Exchange (Nasdaq "DGSE"), Fannie Mae and Freddie Mac. Its private company interests include 100% of Atlantic Federal (www.ATFed.com) a Financial Services Company, and (eNNN.org . eNNN.com) a company developing Numismatic Grading utilizing Big Data that will serve the Museum and large collector relating to grading large coin collections. Its first major project includes recently releasing specialized Numismatic holdings of coins acquired in 2010, from Frank Sinatra's Cal-Neva Lodge & Casino (www.JFKSinatra.com).

Notable alumni

Company Names

Leopold Cahn & Co. (1879-1892) J.S. Bache & Co. (1892-1944) Bache & Co. (1944-19??)

See also

References

  1. ↑ Bache History
  2. ↑ A memorial is planned for long-time summer resident H. Virgil Sherrill who died in January. The Southampton Press, May 12, 2010
  3. ↑ Leo Model Is Dead; Chairman Of Bache, Model, Roland Firm. New York Times, February 22, 1982
  4. ↑ Global "Bache" for Pru
  5. ↑ http://www.prudentialbache.com/view/page/prubache/16354
  6. ↑ http://www.bloomberg.com/news/2011-04-07/jefferies-to-buy-prudential-commodities-for-430-million-1-.html?cmpid=yhoo

External links

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