Editor’s note: Charles Davidson covers the Atlanta tech scene for Local Tech Wire. His column appears on Mondays. The CEO of Robinson-Humphrey Co., Atlanta’s century-old, blue-blood investment firm, stood to speak before 300 or so tech entrepreneurs, investors and hangers on. He needn’t bothered. Most of the drinkers and minglers just kept drinking and mingling; the conversational roar barely abated.

Nevertheless, R-H chief Tom Tracy pressed ahead, explaining in his patrician Southern accent how his firm planned to help Atlanta become an Internet industry hub – and make a few bucks in the bargain. Coming from Tracy, an old-line Southern executive straight from central casting, it sounded incongruous, sort of like Dick Cheney effusing about solar power.

And it was. Tracy was speaking in January 2000, at a shindig on the eve of R-H’s first — and sadly, next-to-last — Netlanta Internet investment conference. The crowd was rude, and it was a harbinger. Ultimately, the Internet “industry” treated Atlanta’s only big home-based investment firm shabbily.

Robinson-Humphrey’s Internet campaign is history. Indeed, R-H’s entire institutional finance business — the glamour side of the firm, separate from the retail brokerage unit — might have been history had SunTrust Banks Inc. not taken it off Salomon Smith Barney’s hands for a mere $11.9 million in a deal that closed in July.

Late to the dot com dance

Thus burned, SunTrust Robinson Humphrey, as it’s now known, has largely withdrawn from the Internet business. R-H had gotten into the Internet game late — in 1999, four years after the Netscape IPO that launched the craze. The firm paid a sack full of money to recruit a bright, personable 30-something analyst, Miles Russ, and teamed him with hyper-energetic investment banker Ed McCrady to spearhead the Internet initiative. The firm announced plans to raise a $200
million fund to invest in startups, and crafted an Atlanta-first tech strategy.

R-H aimed to extend its good name and reputation into the new Net business being born in its hometown. McCrady once noted that in 1999, because he was spending so much time courting hometown companies, he took half as many trips on Delta as normal. Russ and McCrady figured there were maybe 400 Net companies in metro Atlanta in early 2000. They wanted to romance those firms early to get lucrative underwriting business later.

Robinson-Humphrey’s Internet push, like Tracy’s remarks that night two years ago, was incongruous in a couple of ways. First, R-H was a conservative institution that tried to jump on a speculative trend late, only to see the trend collapse under them. Second, Robinson-Humphrey had built its business, starting in 1894, around long-term relationships. There was nothing long-
term about the Internet boom.

Netlanta campaign burns out

Venture-backed startups, including those in the South, were as concerned about relationships as a porn star. When looking to go public in 1999 or early 2000, they wanted a big brand name investment bank — Goldman Sachs, Morgan Stanley, Robertson Stephens or CSFB — for the cache. And when Southern tech companies were flocking to the public markets — 62 went public in 1999 – the big national banks, not the dwindling ranks of Southern regionals, got most of the underwriting business.

Now, of course, there is virtually no underwriting business. There might not be for a while. Many of the local Internet firms McCrady and Russ identified are now history. So is the whole Netlanta campaign.

McCrady left R-H later in 2000 to head up the new Atlanta office of Robertson Stephens, the hotshot West Coast tech bank. That gig lasted less than a year, as Robertson Stephens dramatically scaled back its local presence and cut McCrady loose. Russ stayed at R-H, only to depart in late 2001 as the industry he was hired to cover disintegrated.

The disintegration, of course, hit all the investment banks that had massed troops in Atlanta during the boom. Along with Robertson Stephens, J.P. Morgan Chase and DB Alex. Brown also shrunk Atlanta offices or kept them much smaller than planned.

As for the Netlanta fund, it never got beyond raising money from employees — well under $50 million, nowhere near the $200 million initial target, says Scott Rhodes, director of investment banking. The fund is essentially spent. It’s making no more new investments.

Today, SunTrust Robinson Humphrey still considers technology “a very important focus,” Rhodes insists. The firm has six analysts covering the industry, but no dedicated Internet analyst. Rather, the firm is focusing on sensible, workmanlike stuff – supply chain software, network infrastructure
and security software. Likewise, SunTrust Robinson Humphrey has, as the market has dictated, shifted attention from startups toward mature technology companies.

“The Internet’s still important,” says Rhodes. “It’s just not the end all be all.”

SunTrust Robinson Humphrey hopes it can make even that modest claim about itself.