Investment Banks Await Record M&A Fees

The Dow Jones Industrial average is not the only financial metric that has been hitting new highs. The backlog of banking fees for mergers and acquisitions also continues to mount, hitting its third consecutive monthly record, according to Merrill Lynch analyst Guy Moszkowski. The backlog, which represents fees that investments banks are due to collect from announced but not-yet-completed M&A deals, hit the $9 billion mark for the first time ever in October, the analyst wrote.
A graph in Mr. Moszkowski’s report suggests that of that $9 billion, about $1 billion is set to flow to one firm: Goldman Sachs. (Provided, of course, that none of its deals fall through.) The overall fee backlog has risen 50 percent since October 2005, he calculated.
Announced M&A volume in October rose 55 percent from the previous month, and was 34 percent higher than October of last year. The ratio of announced to completed deals was also up, at 1.6 announced deals for every completed one.
J.P. Morgan was the top investment bank as measured by announced global M&A in October; Merrill Lynch led in U.S. equity underwriting, according to the report.