Mesirow Financial Increases Revenue and Assets Under Management in Fiscal Year 2008

CHICAGO, August 30, 2008 — Mesirow Financial today reported that revenues for its fiscal year ended March 31, 2008 reached a record $492 million, a 9% increase from the previous year. This marks Mesirow Financial's eighteenth consecutive annual increase in revenues. (After the consolidation of certain limited partnerships and limited liability companies required under current accounting rules, audited revenues totaled $860 million). Mesirow Financial remains one of the few private financial services institutions in the industry to disclose annual financial results.

Despite turbulent markets and unprecedented industry events, Mesirow Financial experienced growth across nearly all of its business units, led by significant contributions from the Advanced Strategies (hedge fund strategies), Private Equity and Insurance Services businesses. James C. Tyree, chairman and CEO of Mesirow Financial, attributes the strong performance to the firm's diversified business model, which provides insulation from market pressure and simultaneously offers clients depth and breadth of services. He also credited the firm's independence, its employee ownership, and its exceptionally low turnover of employees and clients.

Mesirow Financial reports that:

  • Shareholders' equity, owned by approximately 300 of the firm's senior employees, increased to $246 million up 17% from $210 million last year.
  • The firm made a significant investment in PrivateBancorp, Inc., forging an important alliance that will capitalize on synergies between the two organizations.
  • Mesirow Financial created a U.K. affiliate and received regulatory approval to implement its U.K. business strategy, which will assist Advanced Strategies in identifying clients abroad; the Currency Management and Institutional Real Estate businesses will benefit as well.
  • The firm invested in new investment strategies, including Institutional Real Estate and Commodities Management to leverage its expertise and continue to meet client needs.
  • Construction of the firm's new state-of-the-art headquarters, located at 353 North Clark Street is underway with an expected occupancy date of late 2009.
  • Mesirow Financial was recognized as one of Crain's Chicago Business' Best Places to Work.
  • The firm received the prestigious "Large Transaction of the Year" award by the Turnaround Management Association (TMA) for an engagement in which both the Consulting and Investment Banking businesses were involved.
  • Mesirow Financial was selected as Currency Manager of the Year by European Pensions magazine.

Tyree also noted that revenues for the first quarter ended June 30, 2008, were $156 million, 43% higher than the comparable period in fiscal year 2008.

Highlights of the FY08 segment performance follow:

Investment Management
Revenues from the Investment Management division increased 24% to $258 million, up from $208 million last year. The Advanced Strategies business again led the firm, followed by performance in Private Equity and Currency Management. Assets under management rose 29% to $32.2 billion, up from $25 billion last year. On the institutional side, more than 40% of the firm's managed assets are owned by overseas clients. The firm's Private Client Investment Advisory business also grew assets under management by 35%.

Investment Services
Revenues in the Investment Services division increased 9% to $87 million, up from $80 million a year ago. Despite challenging bond and credit markets, the Institutional Sales and Trading business performed very well and added new professionals in the government trading and municipal bond departments.

Insurance Services
The Insurance Services division reached revenues of $91 million, up 12% from $81 million in Fiscal 2007. Additionally, Business Insurance magazine ranked the division the 27th largest insurance agency in the nation, up from 28th last year.

Investment Banking
Revenues for the Investment Banking division declined to $19 million from $25 million, primarily as a result of the overall credit crisis. The Corporate Investment Banking business held steady with revenues remaining flat in comparison to the previous year. The Public Finance business experienced a record year, increasing its financial advisory assignments, particularly in Puerto Rico, and solidifying major project finance engagements. The Sale-Leaseback Capital business fell slightly in response to a lack of liquidity to finance sale-leaseback transactions across the market.

Consulting
Historically low default rates and the absence of large restructurings impacted Mesirow Financial Consulting in fiscal year 2008 with revenues declining to $32 million from $49 million. In response to the challenging market conditions, the business accelerated its strategic diversification plan to expand services beyond core restructuring into areas such as valuation services and litigation support. Restructuring opportunities increased in the latter part of the fiscal year, setting the stage for renewed growth in the coming year. The Compensation Strategies business was further integrated during fiscal 2008 and continues to benefit from many synergies with other businesses throughout the firm.

Real Estate
Revenue in the Real Estate division totaled $4.6 million compared with $4.4 million last year (excluding non-operating losses). The division is currently executing a number of projects with a total value of $1.2 billion.

Mesirow Financial is a diversified financial services firm headquartered in Chicago. Founded in 1937, it is an independent, employee-owned firm with $32.2 billion in assets under management and more than 1,100 employees in locations across the country and in London. With expertise in Investment Management, Investment Services, Insurance Services, Investment Banking, Consulting and Real Estate, Mesirow Financial strives to meet the financial needs of institutions, public sector entities, corporations and individuals. For more information about Mesirow Financial, visit its Web site at www.mesirowfinancial.com.

For more information, please contact: Natalie Bauer, Mesirow Financial, 312-595-8158.

 

The Mesirow Financial name and logo are registered service marks of Mesirow Financial Holdings, Inc., © 2007, Mesirow Financial Holdings, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. Any opinions expressed are subject to change without notice. It should not be assumed that any recommendations incorporated herein will be profitable or will equal past performance. Nothing contained herein constitutes an offer to sell or a solicitation of an offer to buy an interest in any Mesirow Financial investment vehicle(s).

Securities offered through Mesirow Financial, Inc. member NYSE, SIPC. Insurance services provided through Mesirow Insurance Services, Inc.

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