Dramatic year for indie investment banking firms

With the local M&A market in lockdown mode and acute deepening of financial crisis, the numbers for 2008 are dramatic to independent investment banking firms. Independent investment firms have reported losses and sharp profit fall for last year, as shown in the statements posted on the website of the Ministry of Finance.

Capital Partners: 87% profit fall

Romania’s largest investment banking firm, Capital Partners, recorded a sharp decline in 2008 profit, by 87%, from 1.5 million euros in 2007, to 224,000 euros a year earlier.

The turnover followed the same downward trend, falling 65% below year-ago levels, from 4.4 million euros to 1.79 million euros in 2008.

Doru Lionachescu (photo), managing partner of Capital Partners says margins were weighed down by the 10month-long negotiations with Piraeus, coupled with the deep recession that set in after the collapse of Lehman Brothers in September.

“2008 numbers reflect the shaky market conditions we dealt with – talks with Piraeus lasted almost 10 months. Additionally, in spring 2008 the real estate deal market was put on ice, and this is one of the most important sectors of activity of the company”, Lionachescu told Wall-Street.

In July last year, Piraeus Bank would acquire 51% equity in Cypriot-based Finnagan Holdings Limited, company that owns 100% of Capital Partners. The deal, estimated at 32 million euros was ground to a halt, the two parties agreeing to an assistance accord.

Altria Capital swings to loss

Altria Capital swung to an annual loss of 24,000 euros in 2008, after 100,000 euro profit in 2007. Turnover fell 60%, from half million euros in 2007 to 219,000 euros in 2008.

Marian Tescaru (photo), managing partner of investment banking firm Altria Capital, says these numbers reflect the M&A market freeze.

This year, Altria has successfully completed two deals: the sale of Diamedix to buyout fund Ged and an overseas deal that Tescaru refused to comment upon.

He said he hoped the 2009 numbers would be significantly better, if the M&A industry emerges from the deep freeze. “We have several mandates in the pipeline, we work harder than usually, we advise more, but not all factors depend on us”, said Tescaru.

BAC Investment Romania � 50% decline in profit

BAC Investment Romania posted a 50% profit fall, from 197,000 euros two years ago to 94,000 in 2008. The company’s turnover dropped 54%, from 1.6 million euros in 2007 to 775,000 euros in 2008.

Matei Paun (photo), owner of investment banking firm BAC Investment said he preferred not to comment the subject, adding that the group’s subsidiary in Romania runs a different business.

The mergers and acquisitions market sank 75% in first six months in terms of value and 18% in terms of volume compared to a year earlier.

Osprey Partners posts losses for 2008

Investment banking firm Osprey Partners reported 50,000-euro loss last year, after 31,000 euro profit in 2007. The firm’s turnover rose 24 percent from 187,000 to 248,000 euros.

Mihai Pop (photo), partner at Osprey Partners says it’s rather an accounting loss, considering that last year, the company had higher costs.

For this year, Pop expects profit to be the same as 2008. “Despite the higher number of deals, costs will continue to rise”, he explained.