The Story of Rice Financial
Our philosophy at Rice Financial has never been to do it all. Instead, we focus on building successful niche businesses where our technical expertise affords us a comparative advantage, allowing us to provide the highest level of expertise available. The pattern we have consistently followed in our history of starting successful new businesses is to identify opportunities that have synergy with our existing clients, our technical skills and with evolving trends in the marketplace.
This approach to growth has served us, and our clients, well. Today, Rice Financial is a participant in more than 10% of all infrastructure bond financings completed in the United States. Our institutional fixed income trading desk averages $15 billion in fixed income sales annually. Our service as a direct lender to HBCUs has exceeded 50 loans. Our institutional equity practice averages 60 million share trades a month, with an average notional amount of $5 billion. And the firm’s new Infrastructure Finance business has already raised more than $1 billion for investment in U.S. infrastructure projects.
More than 25 Years of Innovation
Rice Financial’s story began with the development of our municipal derivatives business in the early 1990s. In 1993, Don Rice left a top Wall Street firm to form Rice Financial Products Company as a municipal derivatives boutique firm. Rice Financial quickly became recognized among the most technically innovative firms in municipal finance, executing derivative transactions totaling nearly $30 billion in aggregate notional amount. We were not just the first minority owned interest rate swap firm, we were actually the first independent interest rate swap company not associated with a major money center bank to execute interest rate swaps on its own balance sheet. Rice Financial was among the most innovative derivative firms in the country, executing numerous industry firsts. Notably, no Rice client ever experienced unfavorable outcomes in their transactions—even through the financial crisis.
In the late 1990s, Rice Financial acquired a small municipal broker-dealer to facilitate the firm’s derivative transactions. In 2005, we expanded our focus on primary market municipal bond underwriting, growing from $6 billion in transactions that year to more than $43 billion by 2012. Until that time, Rice Financial’s broker-dealer had operated independently, co-managing transactions and serving primarily to support Rice’s derivative products business. We also formed our Institutional Fixed Income business in 2005, gaining a foothold in the sales and trading of Treasury securities. In recent years, Rice Financial has grown to average more than $15 billion in taxable fixed income sales annually, almost entirely with municipal governmental customers.
Beginning in 2006, Rice dramatically increased its footprint in the municipal bond business by more than doubling its employment, opening new offices nationwide, and hiring a number of professionals with extensive senior managed bond underwriting experience. In April 2007, Rice Financial consolidated its derivatives business and its broker-dealer under the same name: Rice Financial Products Company.
In 2009, adding to the firm’s existing business serving K-12 and higher education issuers in the bond market, Rice began providing specialized direct lending to HBCU institutions.
In 2018, Rice began building two new lines of business: Institutional Equity, with an exclusive focus on agency execution, and Infrastructure Finance, a private equity asset management arm.
Rice Financial Products Company comprises a parent company, Rice Derivative Holdings, L.P., with several wholly-owned subsidiaries, including a broker-dealer (Rice Securities, LLC) and a higher education direct lending company (Rice Capital Access Program, LLC). Rice Derivative Holdings is fully owned by Don Rice, CEO and founder, and is a certified Minority-Owned Business Enterprise.