Boutique Banks to Cash In

With the collapse or conversion of big banks, smaller competitors stand to scoop up talent and M&A business. Some of their stocks are up sharply

The credit crunch has leveled Wall Street as we know it, but small investment banks hope that leaves more space for them to seize market share from the former titans. Investors are betting it will. The stocks of Lazard (LAZ), Evercore Partners (EVR), and Greenhill & Co. (GHL) have soared. Greenhill is trading for more than 25 times expected profits for 2008, while Lazard's shares are trading at roughly 23 times projected profits. The boutique banks jostle with the likes of Morgan Stanley (MS) and Goldman Sachs (GS) to provide mergers-and-acquisitions advice to corporate clients.

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