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Monday, August 18, 2008

Firms Bet Big On Russia Again

Ten years ago, the Russian debt default helped take down Long-Term Capital Management and skinned most every Wall Street investment bank that rushed to build an office in Moscow. It took until 2004 for Wall Street investment banks to dip their toes into the cold waters of the River Neva once more.

They have since immersed themselves. Russian M&A has boomed, to $115 billion of deals this year to date from $9.7 billion in all of 2002, according to data from Dealogic. In the go-go year of 2007, $195.67 trillion of deals involved Russian companies, according to Dealogic.

While overall investment-banking fees may have shrank 33% in Russia in the first half of this year from 2007, M&A fees in the country rose 18%.

Merrill Lynch & Co. in particular seemed to see its new bets on Russian deal making pay off. The securities firm is the top adviser in Russia, with 12 deals with a total announced value of $28.1 billion to its credit, according to Thomson Reuters.

By: Heidi Moore
Wall Street Journal; August 12, 2008