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Energy companies are once again driving the hiring of advisers, with Jefferies & Co. and Houlihan Lokey Howard & Zukin making leaps in the standings as a direct result of new clients from this sector.
In Houlihan Lokey's case, it is its maiden appearance in the top 10. The firm's emergence is likely more a result of its thriving distressed business (it was ranked the No. 1 restructuring investment banking firm by The Deal's Bankruptcy Insider) than it elbowing in on the energy boutiques' turf. Its new energy client, Elk Horn Coal Co. LLC, while not anything close to bankrupt, is as its name implies active in the coal sector, but the firm's three other new clients this year (that The Deal is aware of) are all distressed situations. Its other new hire for the week, Centre Partners Management LLC's Uno Restaurant Holding Corp. chain, certainly qualifies as distressed -- not that the company is admitting it, of course; CFO Louie Psallidas told The Wall Street Journal that his company is not in "any imminent danger of filing for bankruptcy." For Jefferies, the move up to seventh place is particularly impressive seeing that it just had its own debut on July 22. UBS, whose share price these days seems to resemble a dot-com stock, circa 2001, is nevertheless holding its own in our table, this week inking Deerfield Capital Corp. to keep pace with Jefferies. Granted, the REIT whose market cap was holding steady at $72 million is not going to produce anywhere near the kind of fees necessary to impact the Swiss bank's bottom line, much less turn around its fledgling shares, but at least it demonstrates businesses are still willing to hire UBS for advisory purposes. Then again, a down-on-its-luck REIT seeking advice from an investment bank that had to write down billions in its own mortgage-related assets is rather ironic. But maybe UBS has learned from its mistakes. - Nathaniel Baker
About this List Several times a week or more, there is news about a company hiring an investment bank "to explore strategic alternatives." Sometimes the phrase "including a sale" or "including a possible sale" is tacked on at the end of the statement. Other times the company is less obvious about its want/need to unload assets. In merger arbitrage land, the news triggers a set of Pavlovian responses, usually taking the form of a series of questions: What company did this? Why? Was it due to activist pressure? Earnings disappointments? A combination? More importantly, should we long this stock? If not, do we get in now? Who might buy? How likely is this to happen? Do we short them? Poor arbs. It is said their lives are nothing but long stretches of boredom interspersed with moments of stark panic. (Or maybe that was pilots?) Private equity firms flush with cash will of course take interest for a different reason -- as a potential bidder for some of the companies' assets, or perhaps even for the companies themselves. Lost in all this is the business done by the advisory firm that was hired to conduct the review. Just who are these guys, and how much business are they doing? This blog series was born of an attempt to answer this question and shed some light on this niche of the investment banking world. The below chart is a stab at putting it all into context. To narrow the scope somewhat, we have limited the data to new auctions announced during the 2008 calendar year. Unlike "traditional" league tables, which usually attempt to track revenues, this table is ordered by the number of new clients signed year-to-date by a particular firm. (Not all companies identify the firm they hired to conduct their review, though The Deal reporters are often able to dig this information up through sources. Still, the table will by definition be incomplete for this reason.) Categories Deal Video
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