I-Bank Fees In 2012 Down 6.8% From Year Ago

The total for the most recent year was $8.94 billion, compared with the estimated $9.6 billion tally in 2011. The data indicating a decrease in fee payments is from Freeman & Co., a New York-based boutique advisory firm that generated the information in conjunction with Buyouts magazine’s publisher, Thomson Reuters. 

Buyouts previously reported that through the first nine months of 2012, fee payments totaled $5.1 billion, which was a 37.6 percent drop from the same timeframe in 2011.

Carlyle Group LLC was the top spender. It paid $562.5 million and its largest bank relationships were with Barclays, JP Morgan and Bank of America Merrill Lynch. Carlyle Group’s payments represent a market share of 6.3 percent of the total fees paid by sponsors in 2012.

Kohlberg Kravis Roberts & Co. ranked second, as it paid $463.7 million to banks such as Citi, Goldman Sachs & Co and JP Morgan. Bain Capital and Apollo Global Management were the only other sponsors to pay more than $300 million during the past year. Each had a 3.7 percent share of the total, but Bain Capital was ahead with the actual amount paid at $334.8 million compared with $334.5 million for Apollo Global Management.

The top 20 financial sponsors accounted for more than half of the fees paid to investment banks. They paid $4.6 billion of the total.

Top Earners

Goldman Sachs & Co. remained the top fee earner from sponsors at the end of 2012. It held this distinction at the end of the third quarter as well. It received a total of $753.7 million, which accounted for an 8.4 percent market share of the total for 2012. It earned 8 percent of the fees from Goldman Sachs Capital Partners, another 6 percent from KKR and 4 percent from Bain Capital.

Three investment banks each had a market share of about 7.7 percent of the total fees. Bank of America Merrill Lynch collected $692.2 million, ahead of the $689.9 million obtained by Barclays and the $689.1 million received by Credit Suisse. These three banks had one thing in common, and that is their number 1 sponsor relationship was with Carlyle Group.

Bank of America Merrill Lynch also received substantial fees from TPG Capital and Blackstone Group, while Barclays did a brisk business with KKR and Apollo Global Management. Credit Suisse’s second and third-largest sponsor relationships were with Warburg Pincus and Apollo Global Management, respectively.

Fee distribution continues to be heavily weighted toward the Americas. The region accounted for a 79 percent market share in 2012. The Europe, Middle East and Africa region’s market share was 19 percent, while Asia accounted for the remaining 2 percent.

As for fee distribution by product, syndicated loan fees captured a 43 percent of the total for the most recent year. M&A advisory held a 27 percent share. Fees in the equity capital markets trailed all other groupings at 12 percent, as fees generated by debt capital markets had an 18 percent share.