Independent investment bank Evercore is hiring equity bankers amid a boom in blank cheque companies and initial public offerings after a record first quarter.
The US investment bank posted record first quarter profit of $194.2m, nearly 300% more than the same period last year when dealmaking ground to a halt as the Covid-19 crisis swept across the world. Revenues of $662.3m were up by 55% during what has been a breakneck start to 2021 for investment bankers.
Equity capital markets divisions, which advise on IPOs and other capital raises, have been at the forefront of this gain, thanks in part to a surge in special purpose acquisition companies. Spac, which raise money on public markets to fund acquisitions, reached $96.1bn in the first quarter, according to data provider Dealogic, surpassing annual records.
Evercore will invest in dealmakers within its ECM team, it said. “Our investments in convertibles and Spacs and our expanded sector coverage continue to pay off with a more balanced revenue mix for the business and further opportunities for growth,” said John S. Weinberg, co-chairman and co-chief executive officer.
The bank makes most of its revenues by advising on big ticket M&A deals alongside larger rivals. Advisory fees increased by 43% to $511.9m during the first three months of the year. However, its smaller underwriting business surged by 275% to $79.2m.
The bank’s compensation costs swelled by 46% to $395.4m as Evercore put more aside for bonuses. Investment banking fees have increased to a record $32.9bn in the first quarter, according to Dealogic, with Wall Street banks including Goldman Sachs and JPMorgan posting all-time revenue highs in the first three months of the year.
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