The six US listed independent investment banks – Evercore, Lazard, PJT, Moelis, Perella Weinberg and Houlihan Lokey – reached record highs in recent weeks as investors anticipate a long-awaited recovery in mergers and acquisitions activity under Donald Trump’s second presidency. Investment banks are bracing for a crunch year in which they must deliver a step change in deal fees to justify record share prices and expensive hires made during a two-year downturn.
The six US listed independent investment banks – Evercore, Lazard, PJT, Moelis, Perella Weinberg and Houlihan Lokey – reached record highs in recent weeks as investors anticipate a long-awaited recovery in mergers and acquisitions activity under Donald Trump’s second presidency. Perella roughly doubled in value in the last year, while shares in bulge bracket investment banks including Goldman Sachs, Morgan Stanley and JPMorgan Chase also touched fresh highs in November and December. “Barring some disaster in the economy, we should have just a nice upswing in activity across most parts of investment banking,” said Christian Bolu, senior analyst for US capital markets at Autonomous Research. But the extent of the run-up in banks’ stock prices adds to the pressure on executives and their new recruits to deliver revenues in 2025. The price-to-earnings ratio of the public boutique firms has jumped to 30 to 40 times, nearly double the historical range. Boutiques’ M&A advisory fees edged just 1 per cent higher in 2024, according to LSEG data. One long-time banking chief executive warned over excessive exuberance. “I can’t imagine it works out for everybody. It is a limited pie of deals. There is going to be a reckoning,” the executive said. The independent investment banks have hired heavily in the past two years, taking advantage of the downturn to pick up star bankers to position themselves for a recovery in deal making
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