What a difference a year makes.
Evercore Partners Inc., stuffed with advisory fees from Warren Buffett and GM, plans to increase its staff by 8% to 9% in an effort to bulk up with bulge-bracket-style services.
The New York-based firm said that it will hire 35 to 40 people for underwriting and initial public offerings and staff an equity sales-and-trading platform. It will also begin to roll out stock research, starting with the finance and tech/telecom sectors.
The move is a major strategic step for Evercore, which to date has booked almost all of its revenue by advising. M&A, in particular, is its sweet spot.
Evercore President and Chief Executive Ralph Schlosstein told a WSJ reporter that the restructuring is a way to diversify, while meeting the requests of institutional clients.
"In the financial world, the largest institutional investors are very important, and this will help give us access to them," Schlosstein said.
Investors, so far, are smiling on the plan. Shares of Evercore had climbed nearly 7% on the New York Stock Exchange by midafternoon today.
Michael Wong, an analyst who covers investment banks for Chicago-based research firm Morningstar Inc., said that Evercore will have to compete aggressively for equity investors. However, he thinks that the firm is positioned well to help raise capital for companies.
"It has always been able to hire the top talent on Wall Street and it should be able to land some deals," Wong said. "I wouldn't be surprised if right from the start, they can co-underwrite on some of the top offerings on Wall Street."
The announcement also marks one of the first major strategic moves by Schlosstein, who joined Evercore from BlackRock Inc. in May.
Evercore was launched in 1993 by Roger Altman, a former deputy secretary of the Treasury. It went public in 2006 and has seen its shares rise by about 50% in the years since.
To be sure, the boutique did not escape the fallout of the financial crisis. In the first six months of the year, it posted a $5.9 million loss, from $1.1 million of income in the year-earlier period. However, it swung to a $2.6 million profit in the three months ended Sept. 30, buoyed by a slug of restructuring work for GM and CIT.
Evercore aims to launch the new services in the first half of 2010, after it adds some bodies to its current payroll of 440 workers.
Related: Evercore's CEO Schlosstein Speaks on Expansion, Bulge Brackets and Boutiques
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