Hancock's Cole Expects M&A Boom: Five Spot

BOSTON (TheStreet) -- Daniel Cole, manager of the John Hancock Small Cap Equity Fund(SPVAX Quote), is predicting a "boom" in mergers and acquisitions activity when the economy rebounds. He expects Evercore Partners(EVR Quote) to benefit from the resurgence.

His fund has climbed 30% this year, outperforming 90% of its Morningstar(MORN Quote) peers. It has lost 7% annually, on average, in the past three years, beating 39% of rival funds.

Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks in five fast and furious questions.

Are you bullish or bearish?

Cole: I'm bullish. Economic data related to industrial production and inventory restocking will begin to surprise to the upside. Companies related to these areas of the economy are beginning to see a stabilization in earnings estimates as analysts have gotten overly pessimistic. This is leading to rising valuation prospects for large portions of the economy.

What is your top stock pick?

Cole: Evercore Partners, which has a market capitalization of $360 million. Evercore, headquartered in New York, operates a boutique investment bank that provides advisory services to multinational companies on mergers, restructuring and other strategic transactions. The firm also offers investment management. Marquee clients include General Motors, CIT Group(CIT Quote) and Wyeth(WYE Quote).

We're at a cyclical low point in the high-margin advisory business. The demand for corporate restructuring and reorganization is large and growing.

The past two decades have created excessive leverage and capacity across large swaths of the economy and the landscape of many industries is going to be transformed due to economic necessity. For Evercore, in particular, the financial crisis has created a backlash against its larger, better-known competitors and therefore the company has benefitted from an influx of top talent. The coming boom in advisory and M&A business will be larger and last longer than currently expected.