Moelis' bottom line lifted by 2020 investment boom

The capital raising boom of 2020 has been reflected in the half yearly results of listed investment bank Moelis (ASX:MOE).

COVID-19 led to an urgent rush among ASX companies, big and small, to raise capital, with more than $30bn raised so far this year.

Moelis booked record first-half corporate advisory and equities revenue, up 40 per cent on the prior corresponding period. This was both deal fees and equities commissions, with the company noting volatility and trading volumes substantially increased due to COVID-19.

This follows positive results by its ASX-listed peers Bell Financial Group (ASX:BFG) — which owns Bell Potter — and Euroz (ASX:EZL).

Moelis also reported a solid performance from its asset management division. Asset management fees rose by 15 per cent compared to the first half of 2019.

Additionally, assets under management increased by 30.2 per cent. The company noted that high net worth (HNW) and significant investor visa (SIV) investors became more active later in the first half.

Moelis reported a statutory net profit of $8.9m, up 19.4 per cent on the prior corresponding period.

Shrugging off the ‘unprecedented market uncertainty’

Joint CEOs Julian Biggins and Chris Wyke labelled the news “a solid result in a period of unprecedented market uncertainty”.

“Combined with the strength of our balance sheet, we believe Moelis Australia is well positioned to confidently navigate the current market uncertainty and capitalise on future growth opportunities,” they said.

The group’s performance was despite its exposure to listed companies in the hospitality space, like Redcape Hotel Group (ASX:RDC), and those linked to shopping centres, which have been shut down by COVID-19 restrictions.

Moelis stated it was not walking away from its shopping centre investments despite speculation the e-commerce boom caused by COVID-19 could be permanent.

“We remain of the view that well located shopping centres anchored by non-discretionary retailers will continue to be important community hubs in their catchment area,” the company said.

Moelis shares received a modest boost in early trade.