FEES paid by private equity firms to investment banks decreased by 42 per cent in the first quarter of 2012 after being hit by a decline in M&A activity within the sector.
Research by data provider Dealogic shows that “financial sponsors” – mainly private equity investment funds who engage in leveraged buyouts – accounted for just 15 per cent of total investment bank revenue in the first three months of 2012.
This is down from 21 per cent in the same period last year. Before the credit crunch private equity-backed deals accounted for as much as a quarter of all investment bank income.
Total fees paid by financial sponsors were $2.4bn (£1.5bn) in the last quarter.
Apollo Global Management led the way, paying $180m in fees while Goldman Sachs Capital Partners was second with $139m and KKR was third with $115m.
On the banking side, Credit Suisse captured 10.1 per cent of the market with $237m of financial sponsor fees paid. JP Morgan and Goldman Sachs followed with a 9.8 per cent and 7.4 per cent share respectively.
Following a drop in both buyouts and exits, worldwide financial sponsor M&A fees were just $435m.