While this is backward looking, private equity generated fees for Wall Street are plummeting. That will continue as long as the situation remains here and as long as the de-leveraging trends continue. Try to find someone who thinks this won't continue for at least a while longer.
Revenue generation on Wall Street from private equity fees has significantly slowed this year. Blame the credit crunch and decline in deal volume, but either way the de-leveraging on Wall Street is taking its toll. CNN Money has a summary describing this from LBO Wire.
The top fee-generating firms on Wall Street are Credit Suisse Group (NYSE: CS), Citigroup Inc. (NYSE: C), J.P. Morgan Chase & Co. (NYSE: JPM), Goldman Sachs Group (NYSE: GS) and Lehman Brothers Holdings Inc. (NYSE: LEH).
According to Dealogic, fees are down 75% from last year, from roughly $3.7 billion in first quarter 2007 to about $895 million in 2008. The share of fees to investment banks currently sits at about 10% of revenues, down from about 23% of total revenues this time last year. While leveraged buyouts in the U.S. have slowed, the two most active buyout shops this year, Apollo Advisors and TPG Capital, have paid over $200 million in total fees to banks this year. Ranking behind them are Warburg Pincus, Alfa Capital Partners, and the Carlyle Group.
Low private equity fees on Wall St. . . heading lower
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