SCORECARD - Banking the Buyout Firms

Some investment banks are more dependent on the LBO boom than others.


SINCE THE CURRENT LEVERAGED-BUYOUT boom began two years ago, private equity firms have become the single most important group of investment banking clients for Wall Street. During the 12 months ended March 7, LBO firms paid an estimated $7.6 billion in fees to the banks that helped them negotiate acquisitions and that sold the huge amounts of debt needed to finance the takeovers, according to research firm Dealogic. Investment banks are competing fiercely for those dollars, but some are more dependent on them than others. A look at the estimated fees banks collected during the trailing 12 months, and at how much of each firm’s overall fee pool comes from buyout shops, shows Citigroup and Goldman, Sachs & Co. positioned best. Both finish in the top five for total private equity fees but are among the least dependent on LBOs for overall revenues. In contrast, firms like Credit Suisse, which gets more than one third of its banking revenues from private equity firms, and Deutsche Bank, with 32 percent of its fees from buyout shops, could be more vulnerable when the LBO spigot shuts off.