Three banks in particular benefited from the pickup in business activity that financial sponsors experienced during the first quarter of 2011 as sponsors saw a big jump in the fees they paid to banks. However, the growth rate wasn’t at the same scale as the year-over-year increase Buyouts registered when we visited fees during the comparable period last year.
The total fee payments in the latest quarter more than doubled to $2.3 billion from the $1.1 billion in the comparable quarter of 2010. The big spending is welcomed news for the industry and the tally so far this year is approaching the total banking fee payments ($2.96 billion) made during the first half of 2010. Buyouts wrote about how sponsor fees quadrupled in 1Q 2010 from the depressed levels during the first three months of 2009, a time marred by a credit crunch and other difficult economic conditions.
JP Morgan was one of the big winners from the business flow. It had the top banking relationships with both Bain Capital and KKR, in addition to its number one ranking with Carlyle based on received payments. It also received the second most banking fees from Apollo Management. The percentages suggest JP Morgan was paid about $135.9 million from these four relationships alone.
Overall, JP Morgan received a total of $296.3 million, which accounts for 12.7 percent of the period’s aggregate. Bank of America Merrill Lynch received $278.8 million, while Goldman Sachs & Co. rounded out the top three investment banks at $246.5 million.
Fee distribution by region continues to see the Americas leading the way. The percentage of fees directed to this side of the world rose to 79 percent of the total from the 62 percent market share it held during the first quarter of last year. Europe, Middle East and Africa saw its market share decrease to 19 percent from 36 percent. The level even dropped below the 25 percent share the region represented during the first quarter of 2009. Asia’s market share ended March of this year at 2 percent. It was at 1 percent for the first quarter of 2010.
Equity capital markets accounted for 30 percent of the fees, based on product distribution during the first three months of 2011. It was trailed by syndicated loans at 26 percent. Debt capital markets and M&A advisory followed with respective clips of 23 percent and 21 percent. M&A advisory and syndicated loans each had a 29 percent market share of fees during the comparable period of 2010.
New York-based boutique advisory firm