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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.
Competing against giants such as Goldman Sachs Group Inc and UBS AG, whose trading and research departments employ thousands, Divine's analysts have successfully identified good investment ideas by tracking market and industry exchange-traded funds (ETFs).
"Our research has been short this market since September or October of 2007. We made clients a lot of money," she said. Two years ago, Divine analysts identified U.S. companies that could compete against Asian rivals.
More recently, she said, the firm has bought shares of an ETF that bets against the U.S. real estate market -- the ProShares UltraShort Real Estate ETF. The fund, after soaring to nearly $300 a share in November, tumbled to around $50 last week. She said the firm recently bought shares of the ETF.
Hughes, who bought the shares for her own accounts, contends real estate values probably will continue to fall.
Longer term, though, she remains very bullish on U.S. financial markets and for the prospects for the firm, which she describes as her baby. Hughes, who has 2-1/2-year-old boy, is due to give birth within days.
As for the market, "Eventually, banking will come back, and the IPOs will come back," she said. "It may be the third quarter, it may be 2012, -- but it will happen again."
Editing by Jeffrey Benkoe