Global investment banking revenues from financial sponsors in the first quarter of 2006 were down 19 percent on comparable figures for 2005 according to data provider Dealogic.
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Financial sponsors were responsible for $2.5 billion (€2 billion) of investment banking revenues worldwide in Q1 2006, a decrease of 19 percent on the $3.1 billion generated in the first quarter of 2005. This was, however, almost three times the $845 million generated in the comparable period of 2001.
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Leveraged loan financing accounted for $1.3 billion in revenues, more than half of all sponsor-related revenues generated in the first quarter of 2006, although this was a 13 percent decrease on the $1.5 billion garnered in the same period last year.
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As an indication of how important private equity firms have become to investment bank’s revenue streams, Dealogic said financial sponsors accounted for 15 percent of the $16.7 billion of revenues generated globally by investment banks in the first quarter of this year.
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Goldman Sachs Capital Partners generated the most revenue for investment banks at $130 million, accounting for 5.2 percent of the total sponsor market. Kohlberg Kravis Roberts, The Blackstone Group, Permira and Cinven rounded out the top five.
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JP Morgan was the biggest recipient of sponsor-backed revenues with $262 million, commanding 10.5 percent of the overall sponsor market. Credit Suisse was second with an 8.3 percent share, while Goldman Sachs was third with 7.4 percent.
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Sponsor-related revenues were primarily driven by activity in the US and Europe, although both were down on last year’s figures. The US generated $1.2 billion, down 19 percent from $1.5 billion in the first quarter of 2005, while Europe recorded investment banking revenues of $1.1 billion, a 9 percent decrease on last year’s $1.2 billion.
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The $14.1 billion acquisition of Danish telecom TDC by a private equity consortium comprising Apax Partners, Permira, Blackstone, KKR and Providence Equity Partners helped give Denmark a 9.6 percent share of revenue generated by financial sponsors in Q1 2006. The US led the way with a 49 percent market share.Â
Banking fees from private equity 19% down
Goldman Sachs Capital Partners led the financial sponsors’ global rankings for banking fee revenue in the first quarter of this year, accounting for 5.2 percent of market share.