A resurgent private equity industry, particularly in the US, helped drive significant increases in investment banking fee revenues in the first half of this year, whilst leveraged loan volumes also leapt by more than 60 percent.
Fees paid by sponsors to banks rose by 48 percent to $8.3 billion in the first half.
Across the sponsor community, Apollo Global management, Carlyle Group and Bain Capital Partners paid most fees to banks, with $461 million, $430 million and $414 million paid respectively in the first half. It is only the third time a financial sponsor has paid more than $450 million in a half year, Dealogic said.
On the banking side, the three leading banks in terms of financial sponsor revenue were JPMorgan ($912 million), Goldman Sachs ($766 million) and Credit Suisse ($707 million).
However, as is to be expected, the growth in revenues recorded by Dealogic seem to be patchy. This is particularly the case when looking at the break-down of bank revenue by product (debt capital markets advisory, equity capital markets advisory, loans and M&A advisory). Whilst all of the top 10 banks experienced revenue growth in the first three categories, six experienced revenues in M&A fall. Goldman Sachs’ revenues fell by $118 million and the top ten banks saw a combined revenue drop of $1.15 billion.
This came despite a robust first half for dealmaking. The first half of 2013 saw four buyouts worth more than $5 billion announced. Although far fewer than the 19 recorded in the first half of 2007, it was nonetheless the highest number since then.
On the lending front, sponsor-related leveraged loan volume (encompassing issuance of debt instruments for a variety of uses, including refinancing) totalled $383.7 billion in the first half, an increase of 61 percent year-on-year. JPMorgan booked the highest fee total for loan arranging with $437 million, ahead of Bank of America Merrill Lynch, Credit Suisse, Deutsche Bank and Goldman Sachs. Barclays, Morgan Stanley, Wells Fargo Securities, Citi and Jefferies rounded out the top 10.
Global leveraged buyout loan volume (i.e. acquisition finance) rose by 5 percent from last year, signifying the fourth consecutive year of growth.