Judging by industry chatter and last week’s earnings reports from major U.S. banks, the environment for M&A activity was rather challenging during the second quarter. Just don’t tell that to Evercore, which saw its advisory revenue increase by 22% during a period when all five big U.S. investment banks saw their M&A numbers slip year-on-year. Evercore’s Q2 performance likely portends good things for rival public boutiques that have yet to report second quarter earnings; it also fattens the wallets of Evercore bankers who were coming off two somewhat subpar quarters, at least by their standards.
Evercore booked nearly $444m in advisory fees during Q2, up from $363m during the second quarter of 2018 and $326m over the first three months of 2019. It’s the second-best quarterly performance in the history of Evercore’s advisory business, which accounted for roughly 80% of the boutique’s total revenue during Q2.
Known as one of the best payers on the street, Evercore rewarded its M&A bankers handsomely, allocating $306m for compensation and benefits costs within its investment bank, up from $258m a year ago. The firm’s investment bank also includes a small underwriting business where revenues were down 20% year-on-year.
While Evercore doesn’t break out how many people are housed within its investment bank, the firm had around 1,700 employees in total at last check. That would put the average pay-per-head across the entire firm at north of $180k for the second quarter alone. Not bad considering all the big full-service banks saw their M&A revenues tumble during Q2.
The other good news is that Evercore is hiring. The boutique said it has added 14 senior managing directors across its advisory and equities businesses since the beginning of the year. It will be interesting to see how rival boutiques like Moelis and PJT Partners fare when they report later this month.
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