Merger and acquisition specialists Lazard and investment banking boutique Evercore Partners both put up impressive numbers during the fourth quarter 2010, underscoring that M&A markets have come back and, perhaps, that small is the new big on Wall Street.
Lazard, thanks to deals such as 3G Capital’s purchase of Burger King and Danone’s sale of Wimm-Bill-Dann Foods, earned $104.5 million during the recent quarter, a huge jump versus the loss it reported for the same period a year earlier.
Meanwhile, Evercore boosted its quarterly profit by 100 percent. The firm advised on 19 percent more M&A deals in 2010 than in 2009, and is currently advising on the Sanofi-Aventios takeover of Genzyme, a $20 billion drug (pharmaceutical) deal. Evercore also recently worked on a monstrous equity offering: General Motor's IPO, the largest in U.S. history.
Along with indicating that deal markets are on the rise, the firms' latest results also might indicate that independent investment banks are on the rise -- both as desirable advisors and as employers.
Given the mess and bad press that have surrounded the likes of Goldman Sachs, Bank of America, Barclays and other global banks in the past 12 months, corporations are perhaps becoming more apt to engage smaller (though just as adept) financial advisors when cutting their deals.
As a result, this could cause the smaller, independent banks like Lazard and Evercore to further rise in prestige, increasing their ability to attract the most highly sought-after Wall Street recruits.
(Related: Vault's 2011 Banking Rankings - Prestige)