Beal, Bernard B. 1954(?)–
Bernard B. Beal 1954(?)–
Wall Street pioneer Bernard B. Beal heads M.R. Beal & Company, one of just a handful of black-owned firms in America’s epicenter of finance. Founded in 1988, Beal’s brokerage underwrites and trades municipal bonds, and also offers investment banking and financial advisory services. It regularly earns high marks for its fiscal results and client-service reputation, and its founder’s forceful, energetic personality seems to have helped it thrive in the highly competitive world of finance.
Beal grew up in New York City, but far from the riches of Wall Street. Born around 1954, he grew up at the home of his grandparents in the Morrisania section of the South Bronx. His grandmother once put their name on a waiting list for an apartment in a nearby public-housing project, but Beal’s grandfather was suspicious about the long-term benefits of federally subsidized housing. “We were in a railroad flat that wasn’t nearly as nice as the apartment we would have gotten here,” Beal recalled in a New York Times article by John Tierney as they toured the Forest Houses in 2001. “My grandmother really wanted to move in when our number came up, but my grandfather said no. He said once we went in, we’d never leave.”
Beal’s grandparents eventually saved enough to buy their own place in the Soundview section of the Bronx, and they moved when he was 12. His first contact with lower Manhattan’s money nexus came with a job at a shoeshine stand near Wall Street. A promising student, he benefited from the help provided by A Better Chance, a foundation that worked with students from low-income neighborhoods to place them in top private and public schools. Beal’s high-school years were spent at the Wooster School of Danbury, Connecticut, and though he had money for college lined up when he graduated in 1972, he wanted to become an entrepreneur instead. With his savings, he bought a share in a Jack in the Box fast-food restaurant in the Bronx, and worked part-time as a manager there. He soon changed his mind about college late one evening when the place was held up at gunpoint, and a bullet grazed his leg.
Beal earned his undergraduate degree from Minnesota’s Carleton College and went on to Stanford University’s business school. In 1979, the same year he earned his graduate degree, he began work on Wall Street at E. F. Hutton, a large brokerage firm and one of the most respected names in its day. Initially, he was given a choice of two areas to join: either corporate finance or the municipal-bond desk. Corporate finance was a much more exciting field, where large-scale deals were planned and underwritten, but Beal chose the less glamorous route. Issued by state or local governments, municipal bonds are used to finance large-scale projects, such as affordable housing, new schools, public-transit initiatives, or infrastructure improvements for sewers or highways. The interest earned on them is exempt from some types of income tax. “I wanted to go into municipal finance because it blended with my deep desire to do well and do good,” Beal explained to
At a Glance…
Career: Jack in the Box restaurant, co-owner and part-time manager, Bronx, NY, 1972; E.F. Hutton, New York, NY, bond trader to senior vice president in corporate finance division, 1979-88; M. R. Beal & Company, New York, NY, founder and chief executive officer, 1988-.
Memberships: A Better Chance (board chair).
Addresses: Office —M. R. Beal & Company, 67 Wall St., 17th Fl., New York, NY 10005-3101.
Black Enterprise writer Derek T. Dingle. “I saw it as an opportunity to finance housing and healthcare.”
Over the next few years, Beal rose through the ranks at Hutton and gained a reputation as a sharp analyst. He moved over to corporate finance in 1985 and had reached a senior vice presidency post by the time he jumped ship in 1988 to start his own firm, M. R. Beal, with a group of partners. The initials came from the names of his children, Manning and Mae, and from Rose, his wife Valerie’s middle name.
M. R. Beal began with eight employees and concentrated on winning municipal finance business. By then, minority “set-asides” were commonplace in state and local government contracts for bond deals. Set-asides specified that a certain amount of business should be given to minority or female-owned firms, and even some corporations had similar rules governing the awarding of contracts. Firms such as Beal’s benefited from such practices, but he avoided becoming involved in deals with other brokerage houses that simply wanted minority representation on underwriting bids. Once, a Wall Street acquaintance at a much larger bond firm asked him to step in on a deal, but he declined. “People would have said, ‘Those guys just showed up and took a check for being black,’” he told New York Times writer Diana B. Henriques. “We will not front for anybody.”
In the first three years that Beal’s firm was in business, it was involved in some 167 public underwriting projects, but it also bought and sold bonds on the market for added profit. The sharp trading skills of his staff were the key to his firm’s success, he argued, not winning those underwriting contracts. “There is no way that there is any advantage to being a minority firm in the buying and selling of securities,” he told Henriques in 1991. “Nobody is going to sell a bond to you for one-eighth of a point less just because you’re black.”
By then, Beal was eager to move his firm into the much more lucrative area of corporate finance, but this was a sector dominated for generations by an old-money network. There were few women and even fewer minorities in positions of power at the top investment-banking houses at the time, and a small upstart like Beal’s company faced competition from well-heeled, deep-pocketed players with a network of social and business connections to the Fortune 500 decisionmakers. Though Beal had made some beneficial political contacts by then, they were no help in landing contracts to underwrite initial public offerings, or IPOs, of company’s stock when it was ready to become a publicly traded one. “It’s worse than a glass ceiling, because at least you can break glass,” Beal reflected in the New York Times interview with Henriques. “This ceiling is solid Lucite.”
Henriques met with Beal again in 2003, a dozen years after he announced his intention to move into corporate finance. His firm had had a few successes in the IPO business, most notably with the AT&T Wireless Services deal in 2000, but he admitted to not having made it through the figurative Lucite barrier. “I got beat to hell trying to do that,” he reflected. “Just beat to hell.” Beal & Company was still doing a solid municipal bond business, however, and had even survived an industry-wide upheaval in the mid-1990s when new Securities and Exchange Commission rules went into effect that prohibited municipal-finance professionals from making campaign donations to elected officials in jurisdictions where they had contracts. Because of the new rules, municipal bond volume plummeted 50 percent, and many of the other minority-owned firms doing business in the sector lost crucial business; many had to reorganize, and some went under. Beal’s firm had survived the upheaval, however, and by 2003 had taken senior underwriting jobs on some $5 billion in bond issues since its founding. It regularly appeared near the top of the Black Enterprise’s annual list of leading black-owned financial firms.
Beal’s company even ventured into film production at one point, helping to finance the 2002 movie Morvern Callar. It starred Samantha Morton as a woman who gains fame as an author with a manuscript she found on her late boyfriend’s computer. But he also hired a Wall Street veteran, Stanley E. Grayson, to become the chief operating officer. Grayson, who had served as New York’s deputy mayor for finance at one point, was installed to ensure the long-term prospects of Beal’s firm, and one of his duties, Beal told Henriques, was to remind him of the firm’s mission. “I’ve got somebody who can say, ‘You don’t want to be in the movie business—you want to go to the movies,’” Beal joked in the New York Times article.
Beal has been involved in several civic initiatives, including a board seat on New York’s Metropolitan Transportation Authority, where he worked to improve conditions in New York subway system. He also worked with the New York City Housing Authority in a privatization scheme that encouraged residents of housing projects Forest Houses to turn their buildings into co-operative units, in which the apartments were owned outright by the tenants. “When people own, it changes their perspective on life,” Beal told Tierney of the New York Times. “They take better care of their property and care more about the neighborhood. They demand more services. They make plans…. When they have a stake in the future, they pay more attention to educating their kids.”
Beal also serves as board chair of A Better Chance (ABC), the foundation responsible for placing him in the private Connecticut school when he was a teenager. He was one of 11,000 middle and high school students that ABC had helped since its inception in 1963, and television personality Oprah Winfrey had joined its mission as well, donating a large sum and becoming its national spokesperson. When the foundation executives first contacted him about helping out with ABC fundraising efforts back in the late 1990s, he was not eager to add another job to his already-busy work schedule at the time, he told Henriques. But on the day of their scheduled meeting, “I ran into a kid from my old neighborhood,” he recalled. “He’d gotten into the program, too, but his parents wouldn’t let him go. We talked. He had done some time in prison, but he’d gotten himself straightened out and was working as a runner for one of the firms down here…. Now, that’s a good job, no doubt about that, and I wish him well. But meeting him, it really made me think about what made a difference for me, about giving something back.”
Black Enterprise, June 2001, p. 220.
Bond Buyer, August 31, 1992, p. 2.
New York Times, August 11, 1991, p. 96; June 19, 2001, p. Bl; June 29, 2003.
Wall Street Journal, August 28, 1992, p. B1.
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