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.

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.
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.
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.
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.
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.
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.
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.
The $14.1 billion acquisition of Danish telecom TDC by a private equity consortium comprising Apax Partners, Permira, BlackstoneKKR 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.