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Evercore: Fall in Investment Management Revenues Continues

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Feb. 14 2018, Updated 2:50 p.m. ET

Investment management

Evercore’s (EVR) investment management revenue in 4Q17 fell 26% to $13.2 million compared to $18 million in 4Q16. Its net revenues rose 18% to $21.2 million compared to 4Q16, mainly due to other income of $8 million. Other income was due to a gain on the sale of the Institutional Trust and Independent Fiduciary business.

Management fees and related income were $12.1 million, an 11% rise compared to 4Q16. The increase was driven primarily by higher fees in the wealth management business in the United States and the strong performance of an investment in ABS (asset-backed securities).

Private equity investments were $0.07 million in 4Q17 compared to $1.5 million in 4Q16. The significant fall was due to lower realized and unrealized gains in private equity. The company had a total of $9 billion of assets under management.

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Expenses

Investment management expenses in 4Q17 were $15.4 million, a decrease of 20% compared to 4Q16. The reduction was due to special charges, which reflect an impairment charge of $7.1 million. Investment management expenses were $63.8 million in 2017, a decline of 4% compared to 2016. The decrease was due to a reduction in compensation and non-compensation expenses.

EVR’s main focus is expanding its wealth management and money management business in Mexico.

Evercore is spread across the United States, Europe, and Latin America. Its peers Morgan Stanley (MS) and Bank of America (BAC) operate in the United States, Europe, the Middle East, and Africa. Citigroup (C) operates in Asia, North America, and Latin America. Evercore (EVR) forms 0.94% of the iShares S&P Small-Cap 600 Growth (IJT).

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