Our History
Friedman, Billings, Ramsey Group, Inc. (FBR Group; NYSE:FBR) was founded in 1989 when Emanuel J. Friedman, Eric F. Billings and W. Russell Ramsey borrowed $1 million to launch a research and securities trading firm specializing in the finance and real estate sectors. Hundreds of miles from Wall Street, these three entrepreneurs and 15 other employees established one of the most successful startups in the securities industry in the last half century.
Today, FBR Group is a real estate investment trust (REIT) that invests in mortage-related assets and the majority owner of FBR Capital Markets Corporation (FBR Capital Markets; NASDAQ:FBCM). FBR Capital Markets is a top ten investment bank1 with an international franchise, a major institutional securities trading and research group, and a growing investment management business. In its brief history, FBR Capital Markets has grown from a boutique investment bank with primary expertise in financial institutions into a top-ranked full-service investment bank with broad industry coverage in seven industry sectors.
From the beginning, FBR Group has been research-driven. We opened our doors at a time when equity values were beginning to climb steeply in a rapidly changing economic environment, and there was strong demand for top quality, focused research. Early on, we developed a disciplined approach to corporate analysis focusing on intrinsic value; an approach that critically examines the capital structure of companies as well as the competitive and growth opportunities within industries. This discipline remains a core element of our corporate culture and is applied in our published research, investing and underwriting decisions.
Using this approach, FBR Group was able to identify for clients the dynamics driving rapidly changing industries, particularly those that were poorly understood and inappropriately valued by the market. While the initial focus was on financial institutions and real estate, over time we expanded our research to include coverage of the consumer, diversified industrials, energy & natural resources, insurance and technology, media & telecom sectors.
In the early 1990s, FBR Group introduced proprietary hedge funds, venture capital funds, private equity investments and mutual funds.* In 1992, we took our first steps in the investment banking business, focusing on transactions in our primary areas of specialization – financial institutions, real estate and technology. From the mid-1990s onward, FBR Group, headquartered in the Washington, D.C. metropolitan area, began to expand its geographic footprint, establishing offices across the United States and in London. By the time of its $220 million initial public offering in late 1997, the firm had established a solid presence in the U.S. investment banking community.
In 1997, FBR Group formed FBR Asset Investment Company (FBR Asset), a real estate investment trust (REIT) investing in mortgage-backed securities. An American Stock Exchange company initially, FBR Asset was listed on the New York Stock Exchange in 2002. FBR Group managed FBR Asset's operations, and that relationship enabled the firm to act as a merchant bank, providing financing to clients and potential clients – an important extension of its service offerings.
FBR Group completed its first 144A transaction in February 1997 and has since been the dominant firm in the Rule 144A equity market. In the last ten years, we have completed nearly 10 times as many 144A transactions and raised nearly 10 times as much capital via these transactions as any other investment bank.2
In 2003, three critical steps were taken to strengthen the company’s financial footings. At the close of the first quarter of 2003, FBR Group and FBR Asset Investment were merged. That merger was followed in October 2003 by a $450 million secondary public offering of FBR Group’s shares. In August 2003, we further strengthened our liquidity position through the creation of Georgetown Funding, a proprietary commercial paper program.
As a firm, we take pride in being a good corporate citizen in the communities where we live and work. In 2004, we became a PGA TOUR title sponsor for the FBR Open (formerly the Phoenix Open) – one of the oldest and most popular stops on the PGA TOUR. Each year we host nearly 1,000 clients and guests and provide insightful business forums during tournament week. Since our sponsorship began, more than $30 million has been raised for local and national charities serving children and families.
In July 2006, FBR Group privately sold to institutional investors a portion of its ownership in FBR Capital Markets, a fully consolidated subsidiary formed in June 2006 that houses FBR Group’s investment banking, institutional brokerage, research and asset management businesses. FBR Capital Markets became a publicly traded company in June 2007, and FBR Group reduced its ownership of FBR Capital Markets to just above 50% at that time.
FBR Capital Markets is presently expanding our cross-border capital markets capabilities. Friedman, Billings, Ramsey International, Ltd. (FBRIL), based in London, is now a member of the London Stock Exchange and the Euronext. FBRIL, comprised of an investment banking team and a sales and trading unit established nearly a decade ago, specializes in institutional brokerage and corporate finance and covers the United Kingdom and continental Europe.
*Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. This and other important information can be found in the fund's prospectus. To obtain data current to the most recent month-end and a free prospectus, please call 888.200.4710 or visit www.fbrfunds.com. Investment return and principal will fluctuate so that investors’ shares, when redeemed, may be worth more or less than their original costs. Please read the prospectus carefully before investing. The FBR Funds are distributed by FBR Investment Services, Inc., member NASD/SIPC.
1) Source: Dealogic. As measured by the aggregate value of the U.S. common equity underwritings priced between 7/1/03 and 6/30/08 with apportioned credit including over-allotment to all book-runners. Includes only rank eligible transactions.
2). Source: Dealogic. Relates to total deal value of all pre-IPO 144A equity offered for U.S. and Bermuda issuers priced between 7/1/98 and 6/30/08 with apportioned credit to all book-runners. Credit is apportioned amount of total capital raised including over-allotment. Includes only rank eligible transactions.
