Buyout firms paid out less than half the amount of service fees during the first half of 2009 as they did in the same period a year earlier. Total fees for 2009 dropped to $974.4 million through June versus about $2.3 billion during the first six months of 2008.
Goldman Sachs Merchant Banking paid $49.5 million during the first half of the year.
The distribution of fees on a regional basis remains concentrated in the Americas. On a sequential basis, the concentration in this part of the world rose to 71 percent for the first half of 2009, up from 69 percent at the end of the first quarter. Europe, the Middle East and Asia combined continued to represent roughly 25 percent of the collected fees. Asia saw its share of the fees slip to 4 percent from 6 percent.
The top fee earner during the first half of 2009 was Bank of America, now with Merrill Lynch in the fold, which pocketed with 12.8 percent of fees paid by sponsors, or $124.7 million. It was followed by Citigroup with $102.9 million and then, JP Morgan Chase & Co. at $102.4 million. The amount Bank of America received would have made it the fifth ranked investment bank a year ago, when Credit Suisse was the top fee-earning investment bank with inflows from LBO sponsors of $193.6 million, or 8.3 percent of the total.
The most active product for overall fee distribution was M&A advisory, but the distribution among the various categories was more evenly distributed by the end of the first six months of this year compared with the end of the first quarter, when 64 percent of the fees went to M&A advisory, 17 percent for equity capital markets and 11 percent for debt capital markets.
For the first half of 2009, M&A advisory accounted for 34 percent of the fees earned, followed by debt capital markets (26 percent) and by equity capital markets (21 percent). Syndicated loans, an inactive area in the first quarter, made a strong push to represent 19 percent of the fees paid year-to-date. For more on the top fee-paying sponsors along with the methodology used to gather this information, see the tables on pages 26-27.