One industry – and one industry alone – has been good to Wall Street dealmakers this year.
Investment banks have made $US7.6 billion so far this year advising healthcare companies on equity and debt deals and takeovers, according to Dealogic.
That is the highest level on record and up 35% on the same period in 2014.
Total investment banking revenues across all sectors are down 11%, in contrast, at around $US54.5 billion.
Every other industrial sector outside the healthcare sector has seen a drop in fees.
So why are healthcare bankers killing it right now?
It is mostly because of M&A activity.
Healthcare M&A has earned banks a record total of $US2.8 billion in revenue so far this year, up 51% from the same period last year, according to the data.
Equity capital markets revenue is not far behind, at $US2.5 year to date, while debt capital markets revenue is $US1.3 billion.
We’re not surprised.
As Business Insider reported earlier this year, health insurers have been going deal crazy recently, possibly as a result of Obamacare.
A couple of major deals this year have included Anthem takeover of Cigna for $US54.2 billion and Aetna’s takeover of Humana for $US37 billion. Those two deals alone could pay out up to $US345 million in fees to Wall Street.
And then of course there’s the Wall Street money tree Allergan.
It recently agreed a deal to be bought by Israeli pharmaceutical Teva for about $US40.5 billion. That was the latest in a series of deals involving Allergan, including when Actavis bought the company and kept the name.
Those two firms had generated some $US780 million in fees for Wall Street between 2012 and the July deal with Teva.
Now the total should be somewhere closer to $US820 million. JPMorgan is expected to receive between $US35 million and $US45 million in fees from Allergan for that deal.
JPMorgan tops the league tables in healthcare banking, according to Dealogic, with an 11.6% share of fees. Goldman Sachs follows with 10.5%, while Morgan Stanley has 7.3% of fees.
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