Rodman & Renshaw 'cautiously optimistic' about health of PIPE market

By Stephanie N. Rotondo

Portland, Ore., July 8 - Rodman & Renshaw Capital Group Inc.'s management said it remains "reasonably and cautiously optimistic" regarding the state of the private placement market Wednesday.

In a conference call to discuss preliminary second-quarter results, Edward Rubin, chief executive officer, said the quarter was a record for the company.

"My cautious optimism was not misplaced," he said, adding that 25 financing transactions were closed in the second quarter for $399.4 million. Investment banking revenues came to $27.0 million, above the $24.1 million that came in the same quarter of 2007.

Operating cash flows were $8.4 million.

"While the economic downturn impacted our revenues during prior quarters, as well as that of other investment banks, we are very encouraged by the deal flows, investment banking revenues and cash flows from the second quarter," Rubin stated.

Additionally, Rubin said he is interested to see how the company's peers fared in the second quarter to see if the upward trend was solely due to Rodman's business model or if it was an industry-wide trend.

Sectors to watch

Rubin said that the biotechnology sector has seen an uptick in financings, calling that a "positive development."

"More companies appear ready to do financings, and more investors appear ready to invest," he said.

Rubin noted that many biotech companies have seen their stock prices rising, which is usually when attempts to raise cash are made.

Also, Rodman has allocated "significant resources" to "take advantage" of the U.S.-listed China-based companies that are coming to market.

Away from its core sectors, Rubin said that the company is "beginning to see positive movement" in other sectors such as mining and biopharmaceutical.

Caution remains

But despite the largely positive news out of the private placement arena, Rubin said that the company remains "cautiously optimistic," stating that there is no way to predict "which deals get done and when."

Rodman & Renshaw will officially release its second-quarter earnings on Aug. 12.

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