Profiting From Boutique Investment Banks

Hilary Kramer, the editor of, says that investors should consider ways to profit from rising revenues in investment banking. Kramer says that now, as the credit crisis abates and mergers and acquisitions begin to pick up, investors should closely watch a couple of fast growing New York City-based boutique investment banks that she says are undervalued.

One of them is Evercore Partners (EVR). Evercore was founded by banker and statesman, Roger Altman and specializes in mergers and acquisitions. The bank has been expanding internationally, partly through its acquisition of the British firm Braveheart Financial Services as well as a Mexican-based financial services firm. Kramer says Evercore should grow its asset management business by some 20% under its new chief executive, Ralph Schlosstein. Schlosstein, by the way, was the co-founder and president of Blackrock Group. Kramer expects that as M&A activity picks up and as the company's asset management grows -- and becomes profitable in the fourth quarter -- the stock should perform well, rising by 25% over the next year.

Two Boutique Investment Banks For The Long Haul
Hilary Kramer, editor of

Another boutique investment bank that Kramer says has upside potential is Cowen Group (COWN). The bank, which merged with asset manager Ramius LLC. in November, 2009, is now lead by one of Wall Street's most experienced and legendary deal-makers, Peter Cohen, of Shearson Lehman fame. As with Evercore, Cowen stands to benefit from the rise in M&A activity -- already its fourth quarter 2009 revenues were up 34% to $15.7 million, from the fourth quarter one year ago.