Evercore Profit Doubles as Investment-Banking Fees Climb

Evercore Partners Inc., the advisory firm founded by former U.S. Deputy Treasury Secretary Roger Altman, said second-quarter profit more than doubled as investment-banking revenue climbed. The shares rose to an all-time high.

Net income rose to $16.4 million, or 44 cents a share, from $7.93 million, or 25 cents, a year earlier, the New York-based firm said today in a statement. Excluding some items, profit was 65 cents a share, beating the 55-cent average estimate of seven analysts surveyed by Bloomberg.

Global merger-and-acquisition volume increased 4 percent in the second quarter from the first three months of 2013 to $501.4 billion, according to data compiled by Bloomberg. Evercore, run by Chief Executive Officer Ralph Schlosstein, is advising on some of the biggest announced takeovers this year, including Dell Inc. on its proposed buyout by founder Michael Dell and Silver Lake Management LLC.

“Completed M&A assignments and capital-markets advisory assignments contributed to our strong second-quarter investment-banking results,” Schlosstein said today in the statement.

Evercore rose 2.5 percent to $45.29 at 4:15 p.m. in New York, the highest price since the firm went public in August 2006. The company gained 50 percent this year, compared with a 23 percent jump in the Russell 2000 Index.

Investment Management

Adjusted revenue from investment banking rose 19 percent to $180.3 million, according to the statement. Net revenue from Evercore’s investment-management unit jumped 27 percent to $26.5 million.

Evercore had 62 investment-banking senior managing directors at the end of the second quarter, compared with 58 at the same time last year. Average revenue per partner on a 12-month basis was $10.3 million, Altman said today on a conference call following the results. The figure is calculated based on the number of senior managing directors that have been with the firm for at least a year.

“The M&A and overall transaction environment in our view is fine,” Altman said on the call. “But it’s not white hot.”

Evercore set aside $121.8 million, or 59 percent of revenue, for compensation on an adjusted basis in the second quarter. That compares with $102.8 million, or 60 percent, a year earlier. The firm is “comfortable” adding between four and seven senior managing directors per year, Schlosstein said on the call.

Capital Advisory

Evercore is starting a private capital-advisory business, scheduled for the second half of this year, aimed at secondary transactions for private funds, the firm said earlier this month. The company runs a private-funds group that provides advice on capital raising and private-equity investments for clients including general partners.

Greenhill & Co., the advisory firm founded by Robert Greenhill, said last week that second-quarter profit surged sevenfold to $15.5 million. Chief Executive Officer Scott Bok said advisory revenue will probably fall in the second half of the year for the industry because of a slowdown in announced deals.

Before it's here, it's on the Bloomberg Terminal.