A National Award-Winning Publication

Cabrera Capital Markets: Establishing enduring connections with investors and issuers

In this insightful interview, Robert Aguilar, President of Cabrera Capital Markets, shares the firm’s unique approach to investment banking and highlights its distinguishing factors compared to larger Wall Street institutions.

Negocios Now Staff

Q: How does Cabrera Capital Markets distinguish its investment banking services from its sales/trading division, and what specific focus does it have within the investment realm?

AGUILAR: Investment banking occurs exclusively in the primary markets, where an investment bank creates a security (think bond or stock) on behalf of an issuer (think company or public entity). The buyers (investors) of the security pay the proceeds directly to the issuer. Alternatively, Sales and trading occur in the secondary market, where securities are bought and sold between investors. Since Cabera does both investment banking and sales and trading, we regularly trade in the secondary markets the same securities we underwrote in the primary markets.

Cabrera Capital Markets covers over 500 institutional investors of all sizes, of which roughly 68% have less than $500 billion in assets under management. These buyers not only invest in our primary market issuances of municipal bonds, corporate bonds, IPOs, agency bonds, and asset-backed securities (ABS), but they also trade these same securities and others with us in the secondary market. Ultimately, our goal is to create long-term relationships with our institutional investors and issuer clients. 

Q: Can you elaborate on Cabrera Capital Markets’ approach to providing access to equity capital for both public and private entities, particularly in terms of targeting tier 2 and tier 3 accounts? How does this strategy differ from the larger Wall Street investment banking approach? 

AGUILAR: When an issuer goes to market, it is important to have a diverse investor base of tier 1, tier 2, and tier 3 accounts. The larger Wall Street investment banking approach focuses on tier 1 accounts. At Cabrera Capital, we provide value to issuers by concentrating on tier 2 and tier 3 accounts, which Wall Street may not cover well. In addition, we give tier 2 and tier 3 accounts access to new issues. Our approach of strong service and performance provides value to both the issuer and the investor by bringing senior-level experience and a tailored approach for each client. We believe our competitive advantage is truly found within our employees.

Q: In the realm of public finance, what challenges do state and local governments typically face when considering the sale of bonds, and how does Cabrera’s expertise assist them in overcoming these challenges? 

AGUILAR: Some of the typical challenges a municipality may face when issuing municipal securities are:

  • Fiscal limitations (taxes, costs, charges, rates, etc.) related to the bond offering.
  • An inflationary environment results in increased costs.
  • Maximizing taxpayer dollars.
  • Creating a strong foundation for a credit rating.
  • Selling to a diverse investor base.
  • Managing pension liabilities. 
  • Structuring a bond transaction that meets both the goals of the issuer and investor demand.

We utilize our vast knowledge and experience in underwriting over $850 billion with various municipalities across the country to structure the offering with as much optionality and flexibility as possible for the issuer in an effort to garner the widest investor audience. We pride ourselves on being a trusted partner to municipalities and supporting our issuer clients every step of the bond sale process. 

Q: Could you discuss Cabrera’s involvement in the education sector within the public finance domain, particularly its role in issuing bonds for educational institutions? How does this align with Cabrera’s broader mission and strategy?

AGUILAR: Cabrera has underwritten over $20 billion on behalf of school districts across the country, including Chicago Public Schools, public school districts in Illinois, Texas, New Yor, and California, and Higher Education institutions like the University of Chicago, University of Illinois, Illinois State University, University of California and California State University. Most recently, Cabrera led a $692 million transaction for the Austin Independent School District in Austin, Texas. This bond issue was used to finance the design, construction, and renovation of facilities and technology upgrades in the district, which enhances the students’ learning environment.

Both Martin Cabrera, CEO and Founder of Cabrera Capital Markets, and I are products of the Chicago Public School System and understand the challenges students and faculty face on a day-to-day basis. Now that we can provide service to the education sector, we go above and beyond to ensure a smooth process. Cabrera Capital strives to provide the lowest cost possible when issuing municipal bonds because we understand what high costs could mean for a public school system. Our goal as a firm is to provide great investment banking services, and we strive to partner with our clients in a way that results in getting them the best value.

Q: Regarding Cabrera Capital’s advisory services for middle market businesses, can you provide insights into the types of transactions they facilitate, such as acquisitions, restructurings, and expansions? How does Cabrera leverage its international network to benefit its clients in these endeavors? 

AGUILAR: One of our focuses is middle-market companies with operations in the U.S. interested in transactions ranging from $50M to $500M in enterprise value; we have also worked on smaller transactions that align with the firm’s focus. Additionally, we work with larger companies wishing to acquire, merge or divest divisions. Having received and negotiated thousands of indications of interest, letters of intent, and sales and purchase agreements with buyers and sellers, we have gained extensive knowledge in optimizing key deal terms for our clients, like selling prices or non-compete agreements. 

Since our industry focus is generalist, it allows us to leverage our deep experience in multiple sectors. Cabrera’s international network provides insights into the global trends that influence U.S. markets. This industry knowledge, extensive transaction experience, and senior-level attention to every engagement mean our clients can feel secure in the deals we execute.

 Q: What are some of the most high-profile examples of your firm’s work guiding clients through the IPO process? 

AGUILAR: Over the years, we have worked with some high-profile clients on the IPO process, including Meta, General Motors, Rivian, Hertz, UL Solutions, Mobileye, and countless others.