Evercore takes on the big boys Evercore turned in a bumper fourth quarter. Investment banks in general had a good quarter: there was a welcome flurry of year-end dealmaking. M&A deals jumped 41 per cent globally year on year, to more than $900bn, the most since the fourth quarter of 2007, according to Dealogic. But Evercore's investment banking revenue did even better, doubling to $195m. The shares rose 4 per cent to $37, the highest since 2010 and near the $40 peak of late 2006. In the aftermath of the financial crisis, it has been widely argued that independent advisers like Evercore will give the large diversified banks that have long dominated M&A a run for their money. The big banks emerged from the crash with tarnished images in the eyes of clients, and new financial constraints make it harder for them to hire and keep the hottest bankers. Evercore's compensation ratio in the fourth quarter was 58 per cent, versus 21 per cent at Goldman Sachs. Big firms like Goldman, JPMorgan, Morgan Stanley and Citi still top the global rankings of M&A advisers. But in 2012, the boutiques accounted for 20 per cent of global M&A revenue, Dealogic calculates, the highest on record and up from 15 per cent in 2011. Evercore's market share has risen from 2.2 per cent in 2008 to 5.5 per cent in 2012. There is optimism that M&A volume can pick up this year. It remains 41 per cent below the 2007 high of $4.6tn. Independent advisers mostly offer advice, whereas the big boys, with their balance sheets and marketing prowess, can also help secure debt and equity financing, and the fees earned for doing so raise questions of conflict of interest. The independent model is fine and good when debt is dirt cheap. The risk is that the capital-raising skills of the big banks look more attractive once quantitative easing ends, putting the independents back in their place.