"Divine" woman thrives in Wall Street trenches

By Joseph A. Giannone

NEW YORK (Reuters) - Probably safe to say, Danielle Hughes is unique on Wall Street. She''s owner and chief executive of a firm and about to give birth to her second child.

In the male-dominated world of investment banking and securities dealing, Hughes and her Divine Capital Markets LLC have thrived amid one of the most challenging financial markets in decades.

Certified as a woman-owned enterprise by the Women''s Business Enterprise National Council, Divine attracts business from companies and institutions encouraged to work with minority companies, such as public pension funds.

Yet the little firm''s success has come from providing attentive service to customers and making a number of some smart market calls, she said in an interview.

"It''s all about relationships and technology and knowing your stuff," she said, speaking from Divine''s New York trading floor. "You''re competing with Goldman Sachs and all the other big boys, so you really have to be able to show you can do what they do, and do it faster, cheaper and smarter."

Hughes is a rarity on Wall Street -- both CEO and owner of a firm.

She follows in the footsteps of other Wall Street women, including Muriel Siebert, the first woman to obtain a seat on the New York Stock Exchange in 1967, and Patricia Winans, the first black woman to own a brokerage when she founded Magna Securities in 1991.

As a broker-dealer, Divine executes buybacks, stock and bond trades for diversity-minded companies like Starbucks Corp and IBM as well as pension fund managers. That accounts for about one-third of Divine''s revenue.

"When you try to get business from a big institution and they hear you''re woman-owned, it gets your foot in the door," Hughes, 39, told Reuters.

Starting her career as a stockbroker in 1991, Hughes joined MH Myerson & Co in 1992 as a lowly trading assistant. She worked her way up, making a name as a institutional stock trader during the IPO boom of the late 1990s.

She used her client contacts to launch a market-making firm in 1999, though relations with her partners were strained. In 2001, she said she fought off colleagues who tried to drive her out and prevailed as Divine''s controlling owner.

Her boardroom victory was short-lived. She took over the firm on September 6, 2001, just five days before the World Trade Center attacks sent financial markets into a tailspin. Trading volumes plunged, Hughes said. By 2002, Divine was forced to build new businesses.

"Making markets was just not a business model that could sustain itself. The ECNs came in, making money on either side of a trade. They didn''t have to take risk," she said, referring to ultrafast electronic trading networks.

So Divine became a full-service institutional brokerage boutique, she said, adding research, sales and investment banking services. Today the firm employs about 10 men and six women in New York and will open an office in Chicago next month.

"We''re very aggressively expanding this year. We get all the good resumes now," she said, noting that layoffs across Wall Street have flooded the labor market with top-tier traders and analysts. Hughes intends to add five to seven employees this year.  Continued...