Tom Weisel knows his stuff

You likely think of Thomas Weisel as a brokerage firm, once founded by a Mr. Thomas and a Mr. Weisel. In the tradition of Morgan Stanley and Warburg Pincus. Not so. There’s really a guy with that name, and he goes to work each day trying to build North American growth companies.

I attended a lunch earlier this week with Tom Weisel, and one can only be impressed with his range of experience, considered views and the success he’s had in the venture, i-banking and fund management businesses. He has opinions, and he’ll share them. I’m invariably a fan of business leaders who have views on things. Politics, art, fundraising, business, the plight of the Raptors, media ethics. Anything at all. Mr. Weisel was asked about the U.S. Presidential election, and he thinks the most likely outcome was that Senator Obama will beat Senator Clinton, and then go on to beat Senator McCain (that was before Tuesday’s primaries, of course).

The meat of the lunch was a presentation regarding trends in technology financing and here are some sobering stats:

U.S. Tech IPOs:

In 2007, there were 70 Tech IPOs in the U.S., up from 37 in 2006 and 42 in 2005. What amazed me was that from 1992 through 2000, there were no fewer than 101 Tech IPOs in that market in any given year. To think that the U.S. market still hasn’t recovered from the 1999/2000 immolation!

I.T. Spending Growth:

2006:

North America: 6%
W. Europe: 4%
Asia/Pacific: 7%
Worldwide: 6%

2007E:

North America: 7% (40% of overall 2007 IT spending)
W. Europe: 6% (30% of overall 2007 IT spending)
Asia/Pacific: 7% (15% of overall 2007 IT spending)
Worldwide: 7%

2008E:

North America: 3%
W. Europe: 5%
Asia/Pacific: 6%
Worldwide: 5%

This is not a brutal outlook for our technology clients given the likelihood that the U.S.A. is currently in a recession.

Research Coverage (Focused I-Banking according to Thomson One Analytics; N.A. coverage)

#1. Jefferies: 871 companies covered, 69 research analysts, 13 companies/analyst
#2. Oppenheimer: 784 companies covered, 54 research analysts, 15 companies/analyst
#5. Canaccord: 567 companies covered, 63 research analysts, 9 companies/analyst
#6. Thomas Weisel: 538 companies covered, 36 research analysts, 15 companies/analyst
#9. Cowen: 423 companies covered, 35 research analysts, 12 companies/analyst
#16. Cormark: 307 companies covered, 26 research analysts, 12 companies/analyst
#18. GMP Securities: 265 companies covered, 22 research analysts, 12 companies/analyst

I found these stats interesting for a couple of reasons. Notice the remarkable range in the amount of content produced by the various firms, as well as the notional workload of the analysts at the various companies. Makes you wonder what works better for the buyside: more companies under coverage per analyst, or more time available per company under coverage to devote to research?

The other interesting datapoint that Mr. Weisel shared was that many of the largest pension funds and private endowments still have no weighting to the commodity markets, and that this will be changing over the next three years. Which can only mean ever-more money for mining, mineral and O&G public companies looking to raise exploration and growth capital — unless the mo’ drops and the hedge funds back out, that is.

MRM