Blackstone's IPO Spree: Collateral Damage

Updated from Tuesday, Oct. 13.

NEW YORK (TheStreet)-- So now that we know Blackstone Group(BX Quote) is about to go on a fee-paying frenzy, which investment bank stands to make the most money?

Blackstone CEO Stephen Schwarzman confirmed Wednesday at a conference in Dubai media reports that the private-equity was planning to sell off up to eight of its companies through initial public offerings "in the near future," the Associated Press reports.

The Financial Times, citing a letter Blackstone sent to investors, reported Monday that Blackstone was getting ready to take up to eight companies public and to sell as many as five others.

That is good news for the investment banking industry in general, not just because Blackstone paid out more than $240 million in investment banking fees in 2007, according to data firm Dealogic, but because it means other private equity firms are likely to follow suit. JPMorgan Chase(JPM Quote), Goldman Sachs(GS Quote) and Morgan Stanley(MS Quote) all have reason to celebrate.

But even though those companies are often thought of as the most dominant investment banking franchises, they were not the biggest beneficiaries of Blackstone's largess.

The bank that has earned the most fees from Blackstone since 2000 was Deutsche Bank(DB Quote), by a wide margin. The German bank earned $123 million over that time period, compared to just $88 million for JPMorgan, the third place finisher. Number two was Bank of America(BAC Quote) Merrill Lynch, with $114 million, though whether the combined firms will be able to match that total remains to be seen.

Indeed, much has changed in the competitive landscape for investment banking in the past year, and these numbers may say very little about who will get next year's business from Blackstone.

Still, Deutsche Bank's performance looks especially impressive when one considers that the bank has emerged from the credit crisis in relatively good shape. One way to earn advisory fees--especially if you're a relatively new entrant to the investment banking business, as Deutsche Bank was in 2000--is by doing lots of dubious lending.