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Moelis IPO Prices Below Range

Stocks in this article: MC BX EVR LAZ GHL APO BX CG KKR

NEW YORK (TheStreet) -- Moelis & Co., the newest investment bank to hit public stock markets, priced its initial public offering below an expected range, raising less money for the Kenneth Moelis-run M&A advisory firm.

Ken Moelis Wants Your Money, Not Your Input

Moelis said late on Tuesday the company priced its IPO at $25, a dollar below the low-point of a previously announced $26-to-$29 a share range, raising $163 million for the firm and its selling shareholders. That lower-than-expected IPO pricing may reflect a sagging of investor confidence in recent weeks, as stock markets have stumbled on investors' concerns over valuation.

Instead of selling 7.3 million shares, Moelis will sell 6.5 million Class A shares. The firm will trade on the New York Stock Exchange under ticker 'MC.'

The IPO will be the first major listing of a Wall Street investment bank since prior to the financial crisis.

Moelis & Co. is a boutique investment bank founded by former UBS and Donaldson Lufkin & Jenrette executive Kenneth Moelis. The firm's organizational structure will guarantee Mr. Moelis retains control of the company, given his majority holding of class B-shares that carry ten votes per Class A share.

According to filings, Moelis will own around 97% control of the company's voting power, allowing him autonomy to decide upon board directors, dividends and strategy.

Currently, publicly traded competitor investment banking advisory firms Evercore Partners (EVR), Lazard (LAZ) and Greehill (GHL) aren't controlled by founders or top executives. However, founders of publicly-traded private equity firms Apollo Global Management (APO), Blackstone Group (BX), Carlyle Group (CG), and KKR & Co. (KKR) do control general partner interests in their respective firms, allowing them to decide upon most operational issues.

Moelis & Co.'s IPO is a major story about how the financial sector has evolved in the years after the financial crisis.

$1 Trillion In Deals

As UBS and other major banks saw giant losses in 2007 and 2008, some top bankers fled Wall Street conglomerates and struck out on their own. Moelis & Co. was one of the most audacious examples.

So far, the firm has been a story of disruption on Wall Street. Moelis & Co. advised over $1 trillion worth of transactions in 2013, according to its S-1 filing with the SEC, after a steady climb up Wall Street's so-called league tables. Revenue at the company has grown at a compound annual growth rate of 45% since 2007. In 2013, the company booked $411 million in revenue and net income of $70 million.

The firm has over 300 bankers, including 88 managing directors, in 14 offices globally. Compensation at the firm was $265 million in 2013, a drop from the previous year that helped boost overall profitability.

-- Written by Antoine Gara in New York

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