Boutique Evercore has increased the number of senior investment bankers within its advisory unit by 23% over the past year as it has continued to hire despite a slowdown in deal activity.
The US-based investment bank now has 134 senior managing directors within its advisory arm, it said in its second-quarter results, up from 109 at the same time last year. This hiring action comes as Evercore earned $1.2 billion in M&A fees in the first six months of 2022, a 12% increase.
Earnings at independent investment banks have held up better than larger rivals as fees are more skewed toward M&A, which have remained relatively high as other product lines such as the subscription of capital and debt, have fallen.
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Evercore’s M&A fees were $576.2 million in the second quarter, up 3%, while overall revenue fell 8% to $630.9 million. Its smaller subscription business earned $13.5 million, down 72%.
Evercore’s bigger rivals have signaled cuts or a slowdown in hiring as the deal boom that brought in a record $130 billion last year has begun to wind down. However, the boutique investment bank has hired seven senior traders so far this year: in the past two months, Herb Yeh and Chris Buddin joined the bank to cover technology, and Jason Fournier was hired to its capital markets.
Compensation costs have eased despite ramped-up hiring at Evercore, with the bank investing $388.9 million in salary, a 5% drop. While he has hired bankers and raised salaries, variable compensation has gone down, he said. The total number of employees is now 2,135, up from 1,900 at the same time in 2021.
“While our portfolios remain strong, we recognize the increased risk associated with the current geopolitical, economic and market headwinds. We remain confident in our growth strategy and believe that investments in our business will will enable us to continue to achieve success for our customers, company and shareholders,” said John S Weinberg, chairman and CEO of Evercore.
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