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IFMI Announces $13.7 Million Strategic Investment

Institutional Financial Markets, Inc. (NYSE MKT:IFMI) (“IFMI”), a
financial services firm specializing in credit-related fixed income
investments, today announced that it has entered into definitive
agreements with Mead Park Capital Partners LLC (“Mead Park Capital”)
and Cohen Bros. Financial, LLC (“Cohen Bros. Financial”), pursuant to
which each will make investments in the Company, totaling $13.7 million
in the aggregate. Mead Park Capital is a vehicle advised by Mead Park
Advisors LLC, a registered investment adviser and a subsidiary of Mead
Park Holdings LP (“Mead Park”), and controlled by Jack J. DiMaio, CEO
and founder of Mead Park, and Christopher Ricciardi, a partner in Mead
Park and former President of IFMI. Cohen Bros. Financial is a limited
liability company that is wholly-owned by Daniel G. Cohen, IFMI’s
Chairman and Chief Executive Officer. The investment and related
actions were unanimously approved by the Company’s Board of Directors
(with Mr. Cohen abstaining) following the recommendation of the Board’s
Special Committee, which is comprised of three independent directors.
The resulting share issuance is subject to stockholder approval and
customary closing conditions. Mr. Cohen, Mr. Ricciardi, each member of
the Company’s Board of Directors and certain members of management,
representing approximately 52% of the shares eligible to vote, have
signed voting agreements in support of the transaction.

Under the terms of the definitive agreements, Mead Park Capital and
Cohen Bros. Financial will purchase shares of IFMI common stock at
$2.00 per share for a combined $5.5 million, and purchase $8.2 million
of newly issued 8% convertible senior notes, convertible into 2,749,167
shares of common stock at $3.00 per share. Of the $13.7 million
investment, Mead Park Capital is investing $3.9 million to purchase
1,949,167 shares of common stock and $5.8 million in the convertible
senior note issuance, and Cohen Bros. Financial is investing $1.6
million to purchase 800,000 shares of common stock and $2.4 million in
the convertible senior note issuance. The common stock to be purchased
by Mead Park Capital and Cohen Bros. Financial, assuming full
conversion of the convertible senior notes into shares of common stock,
and considering Mr. Cohen’s convertible IFMI LLC units, represents a
pro forma ownership interest in the Company of 17% and 32%,
respectively. The invested capital is expected to be deployed in IFMI’s
operating businesses and for working capital needs. The Company expects
to close the transaction immediately following its Annual Stockholder
Meeting, which is expected to be held in July 2013.

“We are very pleased to have Mead Park as a strategic partner in IFMI,
and believe that this transaction is indicative of the value of our
business as well as improving market conditions,” said Mr. Cohen.
“IFMI’s Board of Directors is unanimously supportive of the transaction
and believes the resulting increased capital position will help bolster
our operations and enable the Company to generate increased returns for
its stockholders. I am also delighted to re-invest in IFMI, remaining
the Company’s largest investor, as we continue to strengthen our
capital markets platform.”

Upon the closing of the transaction, Mr. DiMaio and Mr. Ricciardi will
join the Company’s Board of Directors. Mr. DiMaio will be named
Chairman, and Mr. Cohen will be named Vice Chairman of the Board. In
addition, IFMI’s Board of Directors will be reduced from ten to eight
members. Current board members who will be included in IFMI’s proxy
statement for its 2013 Annual Stockholder Meeting for election as
directors are Mr. Cohen, Thomas P. Costello, G. Steven Dawson, Joseph
M. Donovan, Charles John Haraburda, and Neil Subin. After many years of
distinguished service, four current board members will not be included
in IFMI’s proxy statement for re-election at the 2013 Annual
Stockholder Meeting: Walter T. Beach, Rodney Bennett, Lance Ullom, and
Charles W. Wolcott.

Mr. Cohen continued, “We would also like to welcome Jack DiMaio and
Chris Ricciardi to our Board of Directors. We believe their combined
capital markets experience and relationships will enhance the
capabilities of our board and management team. We look forward to their
contributions as we continue to assess our challenges and opportunities
and structure the Company for long-term success. Further, on behalf of
everyone at IFMI, we thank those board members who will not be standing
for re-election in 2013 for their commitment and contributions to the
Company over their many years of service.”

In addition, Mr. Cohen has decided to transition to President and Chief
Executive of IFMI’s European operations and will continue to focus on
growing the Company’s European capital markets and asset management
operations. The Board’s Nominating and Corporate Governance Committee,
along with Mr. Cohen, are currently undertaking a search for a
successor to Mr. Cohen as Chief Executive Officer. Until a successor is
appointed, Mr. Cohen will remain as IFMI’s CEO.

Mr. Cohen concluded, “Given the many promising opportunities in Europe,
I have decided that it would be most beneficial for the Company if I
were to focus my energy on IFMI’s operations in the region. This is an
exciting time for IFMI and I look forward to continuing to work with
IFMI’s talented employees as we build enhanced value for our
stockholders.”

Mr. DiMaio said, “We believe that IFMI represents an ideal strategic
investment, with strong human capital, infrastructure, and
institutional experience on which to grow a first-tier structured
products platform. Mead Park and its principals intend to work closely
with the IFMI management team to bring access to capital and industry
relationships that should create significant leverage for the Company.
We think the Mead Park team can have an immediate impact on the
platform, especially the structured products origination, structuring,
and sales businesses where we have great depth of experience as
operators. We look forward to further developing our relationship with
IFMI and building additional value for the Company’s stockholders.”

Sandler O’Neill + Partners, L.P. served as financial advisor to the
Special Committee of IFMI’s Board of Directors and provided a fairness
opinion on the proposed transaction. Cooley LLP served as legal advisor
to the Special Committee.

Jack J. DiMaio, Jr. is the CEO and founder of Mead Park. Prior to
founding Mead Park, Mr. DiMaio was a Managing Director and Global Head
of Interest Rate, Credit and Currency Trading of Morgan Stanley as well
as a member of the firm’s Management Committee. Prior to joining Morgan
Stanley, Mr. DiMaio co-founded DiMaio Ahmad Capital LLC and served as
CEO and Managing Partner. Before starting DiMaio Ahmad Capital, Mr.
DiMaio was a Managing Director and Head of the Diversified Credit Hedge
Fund Group at Credit Suisse Alternative Capital, Inc. He was also an
Executive Board Member of Credit Suisse Securities (USA), Inc. Prior to
that, he was CEO of Alternative Investments at Credit Suisse Asset
Management. Mr. DiMaio joined Credit Suisse in 1989 and after
completing its sales and trading program, he joined its credit research
group. In 1990, he joined the Credit Suisse corporate bond trading desk
where he was appointed Head Trader in 1995 and Department Head in 1996.
At the end of 1997, he was appointed Head of Credit Suisse Global
Credit Trading. In 2000, he was responsible for the entire Global
Credit Products Cluster and named Head of Fixed Income Division North
America. Mr. DiMaio holds a B.S. in Finance from New York Institute of
Technology.

Christopher Ricciardi is a founding principal of Mead Park. Prior to
joining Mead Park, Mr. Ricciardi held various executive positions
including President at IFMI. Prior to joining IFMI, Mr. Ricciardi was a
Managing Director and Global Head of Structured Credit Products for
Merrill Lynch. Prior to joining Merrill Lynch in April 2003, Mr.
Ricciardi was a Managing Director and Head of U.S. Structured Credit
Products at Credit Suisse. Mr. Ricciardi began his career at Prudential
Securities. Mr. Ricciardi has been a member of the advisory boards of
The Robins School of Business (University of Richmond) and the Richmond
Council (University of Richmond) since 2007. Mr. Ricciardi joined the
board of the LSE Centennial Fund, a charitable organization created for
the purpose of supporting and advancing the London School of Economics’
mission of research and teaching excellence in the social sciences, in
2010. He earned a B.A. from the University of Richmond with one term at
the London School of Economics and an M.B.A. from the Wharton School at
the University of Pennsylvania. He is also a CFA charterholder.

About IFMI

IFMI is a financial services company specializing in credit-related
fixed income investments. IFMI was founded in 1999 as an investment
firm focused on small-cap banking institutions, but has grown to
provide an expanding range of asset management, capital markets, and
investment banking solutions to institutional investors and
corporations. IFMI’s primary operating segments are Capital Markets and
Asset Management. The Capital Markets segment consists of
credit-related fixed income sales, trading, and financing as well as
new issue placements in corporate and securitized products and advisory
services, operating primarily through IFMI’s subsidiaries,
C&Co/PrinceRidge Holdings LP and JVB Financial Holdings, LLC in the
United States, and Cohen & Company Financial Limited in Europe. The
Asset Management segment manages assets through collateralized debt
obligations, permanent capital vehicles, and managed accounts. As of
March 31, 2013, IFMI managed approximately $6.2 billion in
credit-related fixed income assets in a variety of asset classes
including U.S. trust preferred securities, European hybrid capital
securities, Asian commercial real estate debt, and mortgage- and
asset-backed securities.

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