Boutique Banks Pinched

The market turmoil couldn't come at a worse time for some boutique investment banks.

Since last month, investors have sold stocks en masse, fearing that Federal Reserve rate hikes will tip the economy into recession. The selloff has slammed brokerage stocks: The Amex broker-dealer index is down 17% in the last month, far outstripping a 7.7% loss in the S&P 500.

If the swoon has been tough up and down Wall Street, though, boutique investment banks have had it worst. Since May 10, Thomas Wiesel Partners (TWPG Quote) is down 31%, Greenhill (GHL Quote) is off 30% and Jefferies(JEF Quote) is lower by 25%.

The selloff is complicating plans by several boutiques to go public. Cowen, a subsidiary of the investment banking arm of France's Societe Generale, filed Monday for a $235 million IPO. Evercore and Keefe Bruyette & Woods said earlier this year they would try to come public this year, too. ...