(Reuters) - Shares of Greenhill & Co Inc (GHL.N) fell 12 percent Thursday, a day after the boutique investment bank’s quarterly profit missed Wall Street estimates by a huge margin on lower advisory revenue and higher expenses.
Greenhill’s shortfall this quarter was likely due to smaller-than-expected roles on deals, particularly on some of the larger disclosed transactions, Sandler O’ Neill wrote in a note to clients.
The merger advisory firm has been on a hiring spree in the year and has hired 11 managing directors amid a slow pick up in deal-making in the U.S, leading to a rise in compensations.
“The past three difficult years have been ones of extraordinary expansion of our business, with our client-facing managing directors increasing by 2.4 times to 68,” Chief Executive Scott Bok said.
On Wednesday, the company reported a 39 percent rise in fourth-quarter expense. Financial advisory revenue fell 10 percent.
Shares of the New-York based company were trading down 10 percent at $72.3 on the New York Stock Exchange. They earlier touched a low of $72.06.
Reporting by Rachel Chitra in Bangalore; Editing by Vyas Mohan