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Morgan Stanley Top IPO Dealmaker

With two months left to go in 1998, Morgan Stanley Dean Witter looks like it's already clinched the top spot among IPO underwriters in terms of dollars raised for clients in the U.S. markets, according to a new survey.

Measured another way, Morgan Stanley (MWD) is running neck-and-neck with second-ranked Goldman Sachs as both investment banks have taken 23 companies public this year. Morgan's IPOs, however, have raised more than twice as much money as privately held Goldman's, according to MCM CorporateWatch Data Services.

Morgan Stanley has raised $9.59 billion for its clients - representing more than a quarter of the entire IPO market - while Goldman has been responsible for deals totaling $4.45 billion.

According to Renaissance Capital, Morgan Stanley has trotted out four of the top 10 biggest IPO this year. Two of those deals - DuPont oil spin-off Conoco (COC) and energy concern USEC (USU) - accounted for half of Morgan Stanley's totals.

Given the malaise in the IPO market, it's unlikely that the rankings will change much by the year's end, but one bank that could make a strong run is Merrill Lynch (MER). With $2.77 billion to its credit, the nation's largest brokerage ranks No. 4 and has a few big deals in the pipeline that have a chance to get out, including Fox Entertainment and Infinity Media.

Rounding out the top five bankers ranked in the MCM survey are CS First Boston at No. 3 and Solomon Smith Barney at No. 5.

The IPO downturn has hit nearly every investment bank hard this year, but it's landed hardest on Montgomery Securities and other West Coast boutique shops that focus on high-tech deals.

Montgomery Securities, now a part of the Bank of America juggernaut, last year handled 32 deals worth about $1.13 billion in 1997, according to IPOMonitor.com. This year, the totals have fallen to 11 IPOs for $529.5 million, according to MCM.

Hambrecht & Quist's numbers have fallen to seven deals worth $270.1 million from 15 offerings worth $415.8 million in 1997. Robertson Stephens, which was sold by BankAmerica to BancBoston this year, has fared better: The bank has completed 14 deals at $619.6 million, compared to 16 deals at $523.4 million last year.

"This is what's wrong with the IPO market," said John Fitzgibbon, editor of The IPO Reporter. "The people who have performed well in the past haven't done so well now."

Even Morgan Stanley and Goldman Sachs couldn't get a buzz-infused deal from Healtheon completed, and an upcoming IPO from E-Tek Dynamics from the tow banks now appears uncertain.

Written By Darren Chervitz

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