October 19, 2011 / 8:31 PM / 8 years ago

UPDATE 3-Volatile mkt fails to dent Greenhill Q3

* Q3 EPS $0.28 vs est $0.20

* Q3 rev $60.4 mln vs est $55.1 mln

* Looking to sell Iridium stake over 2 year

* To use funds from Iridium stake sale to buy back shares

By Jochelle Mendonca

Oct 19 (Reuters) - Greenhill & Co Inc posted third-quarter earnings that handily beat Wall Street estimates on lower costs, and the boutique investment bank said the recent market volatility had not impacted its books of active assignments.

Wall Street giants like Goldman Sachs and JPMorgan have reported weak results from their investment banking segment as volatile equity markets and uncertainty over the U.S. economy held back merger activity.

“I’m certainly not saying our pipeline is immune to whatever may happen in the economy or markets globally, but it is so far so good when it comes to the impact of recent market activity,” Chief Executive Scott Bok said on a conference call.

Bok attributed part of his outlook to the fact that more companies are moving to the use of independent advisors, as they shy away from the possibility of conflicts of interest that can rise with use of large banks.

Boutique firms like Greenhill and its rivals Evercore Partners and Lazard Ltd are moving up the league tables of financial advisors as clients prefer the more specialized services they offer.

Despite the market meltdown in August and September, Bok said he expects “good” full-year advisory revenue.

“Our outlook reflects a continuing high level of activity in Australia and improving levels of activity in North America, Europe and Japan,” Bok said.

“The pipeline of fund placement assignments also is continuing to develop favorably after a difficult few years.”


The distress of his larger competitors will help bolster Greenhill’s stable of advisors.

Bok said he would be surprised if the bank did not make a few hires over the coming months.

“August was a horrific month for our big bank competitors, and it just looks like we are seeing some very high quality talent that looks like it may flush out of those banks again.”

JPMorgan said is looking to cut 1,000 jobs, following similar moves by UBS . Goldman Sachs also said it was considering cutting jobs.

Tops hires will help Greenhill, which has lost senior advisors — including a founding partner to rival Lazard — and had rushed out its second-quarter earnings to calm investor fears over the departures at the firm. .

Greenhill said it expects to sell its stake in Iridium Communications Inc , one of the last remnants of its merchant banking business, over the next two years and use the proceeds to buy back shares.

The firm is the second-largest shareholder in Iridium, with a 13 percent stake, according to Thomson Reuters data.

Shares of the New York-based company closed at $34.72 on Wednesday on the New York Stock Exchange.

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