(Adds Breaking Views link, updates closing share price)
By Avik Das and Mike Stone
April 16 (Reuters) - Shares of Moelis & Co rose as much as 9 percent in their debut on Wednesday despite recent market pressure on financial stocks including boutique investment banks.
Underwriters cut the size of the offering and priced it below its targeted range. Still, the company raised about $163 million after its offering was priced at $25, below the expected price range of $26-$29 per share.
Moelis, founded and led by veteran Wall Street investment banker Ken Moelis, offered 6.5 million shares of Class A common stock, fewer than the 7.3 million it had initially planned.
The company's shares opened at $27 on the New York Stock Exchange on Wednesday and touched a high of $27.22 early on before giving up nearly a dollar from that high. The shares were at $26.40, up 5.6 percent, in afternoon trading.
The recent pullback in U.S. stocks has hurt the IPO market, which got off to a strong start in the first quarter of the year.
The S&P 500 index has fallen 3 percent since touching a lifetime high of 1,897.28 on April 4, the same day that Moelis announced its expected pricing range.
A number of recent high-profile trading debuts including Ally Financial Inc and King Digital Entertainment Plc failed to click with investors, who have been picky in a crowded IPO market.
In contrast, IPOs of smaller technology firms, mostly cloud-based service providers, and biotechnology companies have fared better.
At least 84 companies have raised about $18 billion so far this year in the U.S. IPO market, the highest amount since 2008.
KEN MOELIS KEEPS CONTROL
Ken Moelis will retain control of the company by holding all of the class B shares, which have more voting rights than the shares offered in the IPO. (r.reuters.com/dyz37v)
The voting structure of the shares will not only protect the company from attacks by activist shareholders but also provide a shield from volatility created by Wall Street consensus estimates, Moelis said.
The 55-year-old founded the company in 2007 after leaving UBS AG, where he was president of UBS Investment Bank and previously joint global head of investment banking.
Moelis said it was important to provide a liquidity event for employees with a stake in the firm, adding that many employees had received a portion of compensation in stock for up to seven years. Still, managing directors are prevented from selling stock for at least three years, he said.
Moelis started his career in 1981 at junk-bond pioneer Drexel Burnham Lambert after graduating with an MBA from the Wharton School of Business.
The compensation structure the IPO creates will allow the company to remain focused on clients, versus companies where control rests in the hands of shareholders, he said.
The New York-based company, which says it has advised on deals with a combined value of more than $1 trillion, has about 300 advisers in 15 offices across the world.
The company advised H.J. Heinz Co in its $23 billion takeover by Warren Buffett and Brazilian private-equity firm 3G Capital. It also advised Omnicom in its $35 billion merger with Publicis SA.
Moelis was also an underwriter for its own offering, which was led by Goldman Sachs & Co and Morgan Stanley.
Moelis' IPO comes at a time when the M&A market is starting to perk up but shares of other boutique investment banks have been under pressure.
Shares of Greenhill & Co Inc have fallen about 9.3 percent this year to Tuesday's close, while those of Evercore Partners Inc are down 10.3 percent.
Moelis' net income almost doubled to about $70 million in 2013, while revenue rose about 7 percent to about $411 million.
IPOs of Chinese social media company Weibo Corp and Sabre Corp, the owner of Travelocity website, will be priced later on Wednesday.
Moelis' shares closed at $26.15, up about 4.6 percent, on Wednesday on the New York Stock Exchange. (Reporting by Avik Das in Bangalore and Mike Stone in New York; editing by Prateek Chatterjee, Saumyadeb Chakrabarty and Matthew Lewis)