Public Financial Management, Inc.

Public Financial Management, Inc.
Name	Public Financial Management, Inc.
Type	Private
Industry	Financial advisory
Founded	1975
Headquarters	Philadelphia, Pennsylvania
Area served	United States, Canada
Key people	Jay L. Sarlo (President and CEO)
Num employees	600+

Public Financial Management, Inc. is a United States-based independent financial advisory firm providing fiscal, capital markets, and strategic consulting to subnational issuers. Founded in 1975, the firm offers services spanning debt issuance, restructuring, pension advisory, and municipal strategy for state and local entities across North America. Its clients include municipalities, transit agencies, utilities, and higher education institutions.

History

The firm was established in 1975 in Philadelphia, Pennsylvania during a period of municipal finance evolution that included landmark events such as the Municipal bond market, shifting regulatory frameworks like the Securities Act of 1933, and fiscal crises exemplified by the New York City fiscal crisis of 1975. Early growth paralleled developments in capital markets influenced by institutions such as the Federal Reserve System and entities like the Municipal Securities Rulemaking Board and Municipal bond insurance providers. Throughout the 1980s and 1990s the company expanded services amid trends driven by legislation including the Tax Reform Act of 1986 and shifts in accounting standards promulgated by the Governmental Accounting Standards Board. In the 2000s and 2010s strategic expansion coincided with crises and reforms tied to events like the 2008 financial crisis and pension debates in jurisdictions such as Detroit, Michigan and Puerto Rico.

Services and Specializations

The firm provides advisory work in areas including debt issuance, where practitioners interact with markets such as the Municipal bond market and instruments like Revenue bond and General obligation bond structures, as well as derivatives related to Interest rate swap arrangements. It offers pension and OPEB advisory addressing issues similar to those handled in CalPERS and by actuaries influenced by standards from the American Academy of Actuaries. Capital planning services draw on methodologies used by agencies like the Department of Transportation (United States) and transit authorities such as the Metropolitan Transportation Authority. Strategic financial planning work encompasses forecasting practices comparable to those employed by Moody's Investors Service, Standard & Poor's, and Fitch Ratings analysts. The firm also advises on bankruptcy, restructuring, and fiscal recovery scenarios akin to proceedings under the U.S. Bankruptcy Code and high-profile cases such as the Bankruptcy of Detroit, collaborating with law firms and financial institutions seen in restructurings like those involving Puerto Rico Public Finance Corporation.

Organizational Structure and Leadership

The company's governance follows a partnership-style model with senior managing directors and a central executive leadership team. The chief executive role has been held by executives with backgrounds in capital markets and public sector finance, similar to leaders at firms such as Goldman Sachs, Piper Sandler, and Jefferies Financial Group. Its board and advisory committees include former elected officials, municipal finance attorneys from firms like Vincent, Boria & Associates-style practices, and former regulators with experience at bodies such as the Securities and Exchange Commission and Municipal Securities Rulemaking Board. Regional offices are organized to serve major metropolitan areas including New York City, Chicago, Los Angeles, and Toronto.

Major Projects and Clients

Clients range from large municipalities to special districts and higher education institutions. Notable engagements mirror advisory roles in transactions comparable to those for State of California infrastructure financings, transit financings for agencies like the Bay Area Rapid Transit District, and university financings similar to projects at the University of Pennsylvania and Rutgers University. The firm has been associated with high-profile municipal financings and restructurings akin to work performed during the 2008 financial crisis and for distressed issuers comparable to City of Stockton, California and City of San Bernardino, California. It serves utilities and authorities in matters resembling bond issuances for entities such as the Tennessee Valley Authority-style bodies and port authorities like the Port Authority of New York and New Jersey.

Financial Performance and Funding

As a privately held advisory firm, financial transparency mirrors that of peer firms in the advisory sector such as Moody's Analytics spin-offs and boutique investment banks. Revenue streams derive from advisory fees tied to debt issuances, restructuring mandates, and long-term advisory contracts with public entities, comparable to fee arrangements used by firms like Piper Jaffray and Raymond James Financial. Capitalization is primarily through retained earnings and partner capital rather than public equity offerings, reflecting structures similar to privately held consultancies and investment boutiques. Performance metrics are evaluated in relation to market indicators like municipal issuance volumes tracked by SIFMA and credit rating shifts from Standard & Poor's and Moody's Investors Service.

Awards, Recognition, and Controversies

The firm has received industry recognition for advisory work in rankings and awards analogous to those published by The Bond Buyer and industry groups such as the Government Finance Officers Association. Individual professionals have been cited in media outlets including The Wall Street Journal, The New York Times, and trade publications akin to Municipal Market Advisor. Like many municipal advisors, it has faced scrutiny related to conflicts of interest and fiduciary duties prompted by regulatory reforms after incidents similar to the 1994 Orange County bankruptcy and ensuing rule changes by the Securities and Exchange Commission and Municipal Securities Rulemaking Board. Controversies in the sector often involve debates over bond counsel relationships, disclosure practices, and the role of advisors in complex restructurings, subjects paralleling disputes in cases such as the Bankruptcy of Puerto Rico.

Category:Financial services companies of the United States