Madison Williams Spins Out of Sanders Morris Harris

Madison Williams & Co. has been formed via a management buyout of the principal capital markets business of Sanders Morris Harris Group.

PRESS RELEASE

Madison Williams and Company, an integrated capital markets and advisory firm, announced today that it has completed a management buyout of the principal capital markets business from Sanders Morris Harris Group ( SMHG). The new firm has received its broker-dealer license from FINRA and is now privately owned by management, employees, and key institutional investors, including Fletcher International, Inc.

Madison Williams has 80 employees in five cities. The new firm’s strategy is to concentrate its resources on industry and product sectors where its integration of investment banking, research and institutional sales and trading services can most effectively meet the needs of the firm’s targeted clientele.

“Over the past 25 years, investment banking firms have become increasingly transaction-oriented at their clients’ expense,” says President and Chief Executive Officer William Sprague, the former head of the Capital Markets business of SMH Capital. “As a private company, we can more efficiently focus on the longer-term needs of our clients by providing thoughtful solutions that meet their financial and strategic needs.”

The cornerstone of Madison Williams’ strategy is the energy sector, where the firm has rapidly established itself as a market leader, completing more than 30 transactions so far this year. The firm is ranked third in number of co-managed energy equity offerings in 2009, having completed 20 public equity and one public debt offering in the oil and gas sector year-to-date. “We have an excellent energy investment banking team, headed by Sylvia Barnes,” Sprague explained. “The SMH Energy practice of Madison Williams exemplifies its growth strategy going forward – hire exceptional people with a strong track record of success and provide them the resources necessary to excel.”

Year-to-date energy transactions include: advising Resaca Exploration, Inc. with its recently announced merger with Cano Petroleum, Inc., executing two PIPE’s totaling C$262 million for Malone Mitchell’s new company TransAtlantic Petroleum Corporation, advising ATP Oil & Gas Corporation on a $150 million infrastructure monetization with General Electric, representing U.S. Energy on its drilling venture with Brigham Exploration Company, and providing a number of fairness opinions. Most recently the firm (as SMH Capital) completed a secondary offering of three million common shares for GeoResources as sole book-running lead manager.

A key component of Madison Williams’ growth strategy is the development of a top-notch research team. The firm currently covers the energy, health care, and industrial sectors, and the research team is co-led by Michael Bodino and Karen Kane. “We are pleased to have our energy research effort under the guidance of Michael Bodino. He is a recognized leader in the exploration and production sector,” says Sprague. The firm continues to attract leading analysts in other industry sectors as it expands its institutional sales team.

In addition to providing targeted institutional sales and trading, Madison Williams is one of a few firms that offers a hedging product to the mortgage banking sector. Led by Ansel Eshelman and Bill Sias, Madison Williams’ Fixed Income Group has taken advantage of the chaos in the mortgage markets to build a leading and rapidly growing product segment that has increased eight-fold in the past two years.

Madison Williams recently hired Stephen Nash to head up the firm’s expansion into targeted non-U.S. based businesses through its OTCQX Group. “We believe that OTCQX advisory is another practice area in which we can become a market leader, and Stephen Nash is recognized as one of the pioneers in this rapidly emerging market,” says Sprague.

Sanders Morris Harris Group retains a minority stake in Madison Williams. In addition, the firm will distribute select retail-oriented capital market products in partnership with Sanders Morris Harris Group, which has $10.6 billion in assets under management. Madison Williams has established its own institutional equity business and currently has 11 institutional salespeople.

According to Sprague, “While there are a large number of investment banking firms, clients seek financial advisors whose uncompromising integrity and valuable insights can lead to long-term, trusting relationships. The Madison Williams team is building a reputation for independent thinking, unquestioned ethics, and the ability to generate and execute creative solutions.”

About Madison Williams

Madison Williams is a privately held, integrated capital markets and advisory firm, offering investment banking, equity and fixed income sales, and trading and research services to institutional and corporate clients. Headquartered in New York, the firm has 80 employees in five major offices, including New York, Houston, Dallas, San Francisco and New Orleans. Madison Williams (formerly the capital markets business of SMH Capital) was recently spun out of Sanders Morris Harris Group (Nasdaq: SMHG) in a management-led buyout. For more information about Madison Williams, contact 212-317-2707, or log on to http://www.madisonwilliams.com/.

About Fletcher International, Inc.

For more than 18 years, investments from Fletcher International, Inc. and its affiliates, structured by Fletcher Asset Management, Inc., have supported dynamic and responsible management teams leading more than 50,000 people at dozens of companies. Additional information is available at www.fletcher.com.

About Sanders Morris Harris Group

Sanders Morris Harris Group is a wealth management company that manages approximately $10.6 billion in client assets. Client assets include the gross value of assets under management directly or via outside managers and assets held in brokerage accounts for clients by outside clearing firms. Its corporate philosophy of investment in common aligns its interests with those of its clients. Sanders Morris Harris has more than 600 employees in 21 states. Additional information is available at www.smhgroup.com.