Cantor Fitz Moves To Build Muni Service, Hiring Kenny Execs

Cantor Fitzgerald L.P. plans to develop a municipal bond information service and has hired two top Kenny S&P executives -- Tom Mulrooney and Art Gillin -- to build its muni data business. Kenny moved fast to fill its managerial void, promoting two from within, and wooing Donald Totter from his post as managing director at Knight-Ridder.

Cantor's moves on the muni information business come weeks after some 20 of its muni brokers in New York defected en masse to form a new desk at Tullett & Tokyo Forex Inc.

But if it can find the data to sell, it can find a buyer. Late last year, Dow Jones/Telerate's 15-year distribution agreement with McGraw- Hill's S&P Blue List expired, leaving open an obvious delivery channel for Cantor's muni data. While Telerate has continued to carry Blue List on a month- to-month basis, Cantor retains the right it has long held -- but never exercised -- to be Telerate's sole source of muni data.

Taking the reins of Cantor's muni push, Mulrooney leaves behind seven years of tenure at Kenny, most recently as senior vice president and director of trading at Kenny. Gillin, also a Kenny senior vice president, was responsible more specifically for Kenny's information business.

Kenny in turn hired Knight-Ridder heavy hitter Totter. Totter, who begins work at Kenny today, will oversee information business as senior vice president, marketing and business development for J.J. Kenny Co. The J.J. Kenny unit comprises Kenny's brokerage business and its McGraw-Hill Municipal Screen, Kenny S&P Information and Kenny S&P Evaluations.

Knight-Ridder managing director Paul Cooper will assume Totter's responsibility until a replacement for Totter can be found. "As is Knight-Ridder's practice," says Cooper, "we will try to fill the position internally if we can, and have begun the process of an internal search. If necessary, we'll start looking outside thereafter."

Totter left Knight-Ridder for the second time last week. Years ago, Totter resigned from a position as vice president of sales for Tradecenter at Knight- Ridder to join Reuters as vice president of marketing -- but returned to Knight- Ridder three years later (IMD, Feb. 20, 1990).

As for Cantor, it's still unclear whether its information will be carried exclusively via Telerate or some other market data vendor, or whether the broker might elect to build and sell the information on its own platform, a la the Kenny Drake screen.

Some observers suggest that Cantor will hold out the spectre of selling the data elsewhere until it has reached an agreement to sell it exclusively via its long-time data partner, Telerate.

In the game of distribution agreement negotiation, Cantor holds an additional trump card in the form of a long-dormant right to be Telerate's exclusive muni data source.

Cantor gained the right in the '70s -- but lacked an information service to sell. In the absence of such a service, Telerate sixteen years ago signed a deal with McGraw-Hill to carry S&P Blue List's muni offerings.

Not only did the deal elbow in on Cantor's delivery channel, it prohibited Telerate from distributing any non- S&P muni price services. McGraw-Hill, however, retained the right to deliver the service over other market data vendors' networks, and has done so ever since.

As Cantor's muni business -- and information sales ambition -- has grown, Telerate's deal with S&P has also grown as a bone of contention between Cantor and Telerate.

When S&P's contract with Telerate expired in October (IMD, Nov. 9, 1992), both Thomson, with its well-entrenched Munifacts muni offering prices, and S&P were negotiating non-exclusive distribution deals with Telerate. But hampered by its lingering deal with Cantor, Telerate went month-to- month on its agreement with S&P and was left to face Cantor's newly invigorated muni data dreams.

But Cantor must still recover from the departure of the nearly 20 muni brokers that left last month. Thus far, along with Mulrooney and Gillin, Cantor has found a new head for its muni desk, Al Poto, whom Cantor enticed from muni broker Titus & Donnelly Inc.

Meanwhile, the two largest vendors of municipal bond information -- Thomson with its Munifacts Plus and McGraw- Hill with its McGraw-Hill Municipal Screen -- are nearing launch of their next-generation data platforms. Both are Microsoft Corp. Windows- based services and both provide a consolidated delivery platform for a variety of each vendor's muni-oriented information.

Thomson's Muller Data Corp. muni pricing unit and Munifacts sister announced last week that it had received $3.5 million from its parent to fund a major overhaul of its internal systems. Muller Data plans to upgrade to a UNIX- based distributed architecture relying on relational databases. The systems will ultimately support additional delivery capabilities and new data elements and types.

For Treasury data, Munifacts has signed with interdealer- broker Garban Ltd. McGraw-Hill, meanwhile is holding talks with Liberty Brokerage Inc. about taking a stake in the Treasury broker -- and gaining rights to its data (see related story). Under its 25-year exclusive agreement with Telerate, Cantor may not use Treasury data as part of its muni service unless it either sells the service directly or delivers it via Telerate.