How a Wall Street firm that suffered epic losses vowed to take care of its own-and look to the future
His willingness to embrace new challenges and expand his horizons has benefited KBW, which today is one of the premier boutique investment and research firms in the nation, earning $17 million in profit on about $308 million in revenues last year-compared with more than $185 million in revenue generated in 2001.
With new offices in Atlanta and London, KBW tracks 489 financial service companies now, compared with about 270 before 9/11, and doubled the number of employees, to 430. Last year, its research coverage received high marks in Institutional Investor's "Best of the Boutiques" survey. This year, the Wall Street Journal named five of its analysts "Best on the Street." Increasingly, KBW is leading investment deals that many expected to go to far larger firms.
That's a long way from where the firm was five years ago. "We aren't taking victory laps," says Thomas Michaud, KBW's vice chairman and president. "But taking care of the families and rebuilding the firm were some of the most important things we could do. And we are satisfied with the way it turned out."
KBW worked aggressively for the families, developing a shepherd program in which employees became guides for them. During the first few months, these designated employees offered emotional support and provided help with funeral arrangements and other pressing needs. Later, they made sure families had the help they needed to file complicated 9/11 compensation and insurance claims and to manage their estates.
Duffy also established the KBW Family Fund. For a total of four days between 2001 and 2003, KBW donated the profit from every trade to the fund. Other firms stepped forward to run trades through KBW, helping it raise more than $16 million for families, money that is paying insurance premiums and sending children to colleges and private schools; about $12 million has been given to the families of KBW employees who died on 9/11. If the fund runs dry, Duffy says, the firm will replenish it with trading income. "And we would tug at the same heartstrings," he adds, saying he expects Wall Street would again come out and help run the numbers up.
Duffy's support hasn't gone unnoticed. Dolores LaVerde has never gone to any of the 9/11 anniversary memorials at KBW. Her loss is still too fresh. But she greatly appreciates the dedication the firm has shown in memory of her daughter, Jeannine, an administrator at KBW who perished that day. The firm quickly distributed funds to help support Jeannine's 10-year-old son, Christopher. A KBW employee sent him a gift that first Christmas. And LaVerde continues to be notified every time there's another gathering or memorial service. "They have been generous and they have been in communication," she says. "They have remembered, and they have honored their people who were killed that day." Nothing, of course, can make a loss such as hers any easier to bear. This sad fact binds Duffy, LaVerde, and thousands of others who lost loved ones on that terrible day five years ago. "It is still a knife in the heart," says LaVerde, of her daughter's death. "We remember her every day."