BERAL, INC.  
Andrew G. Racz  
Director of Research  
300 East 54 Street, Suite 26C  
New York, New York 10022  
Telephone: (212) 319-6949  
Fax: (212) 753-1944  

 E-mail: mlikar@aol.com   

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September 3, 2008

By the second half of 2008, the United States unnecessarily created a real estate crisis which has shaken up the very foundation of investment banking all over the world. In fact, we have created the money crisis of the 20th century—the tragic version of the inverse Marshall Plan.

While the markets have been institutionalized in the beginning of the 1990s, followed by the 21st century, the creative side of the merger acquisition and money raising functions have gradually shifted to a set of new companies that call themselves “alternative asset managers” and “alternative merger and acquisition entities.” These entities—of which Evercore is a good example—gradually broke into the most profitable segment of traditional investment banking.

Next to the traditional international merger companies like Lazar, there came an upstart, Greenhill & Company, an investment banking firm in North America and Europe that operates with only 214 employees. The company offers advice on valuations, on strategy, structuring alternative deals and financing. Greenhill was formed by a group of individuals coming from major brokerage firms in the 1990s, but it has accumulated a corporate value remarkable in its achievements.

The remarkable thing was that Greenhill achieved is revenues of $430 million, an equivalent of $15 per share.

With 26.77 million shares outstanding, the resulting $1.53 market cap provides $76.500 value per employee.

We mustn’t forget that this has happened at a time when a traditional investment banking house, Lehman Brothers, shrank to a capitalization of $16 billion and its balance sheet is actually of questionable value.

Meanwhile, the world has actually expanded. By the year 2010, 7 billion people will be working, domestic and international transactions will exceed $100 trillion. The largest steel company Mittal, which has been put together by mergers, has a market cap of $120 billion, the potential takeover of Rio Tinto by BHB has a size of $140 billion, and Cleveland Cliffs is contemplating a $10 billion purchase of a large American coal company.

Our intellectual assumption is that the international corporate world needs companies, needs modern banking companies, like Evercore Partners, Inc. Evercore Partners is nothing but people. It was formed less than 14 years ago by Roger Altman, a former Assistant Secretary of the Treasury, who worked under the legendary Senator Lloyd Bentsen. By definition it is an investment banking boutique that provides advisory services to multinational corporations worldwide on mergers, acquisitions, divestiture and reconstruction.

The size and numerical scope of the so-called independents are still Lilliputs in the total picture.

We do not consider the performance of Evercore financially indicative of their future. Their numerical evaluations do not reflect the importance they are destined to play in the international advisory business.

Going into the second half of 2008, the numbers are solid but alone they do not reflect the future. Like any rapidly growing business, with no historical precedent, the initial figures may indicate the potential direction and growth but the earnings figures do not indicate the future.

The actual and projected business, however, is where the future value lies. In fact, Evercore and other private equity bankers are to be judged as a young movie company. United Artists was formed by Charlie Chaplin, Mary Pickford and Douglas Fairbanks, Sr.

Many years later Steven Spielberg formed a company.

They both represented a trend but their early figures did not indicate the enormous future success, but rather their early performance served as a guideline.

With an infinitely better backing of the business, helped by the recent Japanese financing—EVR can look for a $100M quarterly business sometime in 2009.

A positive stock market, always plausible capital gains possibilities—all helping per share earnings.

Looking at the current and just closed transaction, one could surmise that one is dealing with a billion dollar company. The Mizuho corporate deal is undoubtedly a turning point in Evercore’s early history.

In the course of the last year there has been a tremendous institutional accumulation which is reflected partially in the table below.

Only recently Evercore made two major decisions.

This decision is actually a success story for Legg Mason, who matched with money management business its basic brokerage, and Merrill Lynch that owns its most important assets, 49% of Brooks & Company.

It is now obvious that major changes are facing both the corporate advisory and money management business.

The traditional risk of “toxic” money management is over. Securities oriented money management will never again be mixed with options, futures and real estate.

The hedge fund business which reached $2 trillion will be stripped of tax advantages by the new administration and probably and rightfully will lose many members for non-performance.

At the same time movement of equity money in responsible hands will have a totally unheard of expansion. The hedge funds have reached $2 trillion without uniform performance; responsible and traditional investment management could reach $5-10 trillion in a decade. Considering that Evercore has 42 million fully diluted shares, entering this enterprise has much to offer for current stockholders. As we mentioned earlier, the past, impressive as it may be, can only vaguely be used to predict corporate future.

Evercore Partners Reports Second Quarter 2008 Results; Declares Quarterly Dividend of $0.12 Per Share
Thursday, July 24, 2008 6:00 am ET
Highlights

Concerning the advisory business the current backlog of $56 billion is nothing but an initial test of the international community of Evercore’s strength. Multiplying the backlog we can come to the conclusion that the actual numbers could be remarkable.

Evercore is a small capitalization international advisory and money management concern. Its current capitalization is about $150 million. Its backlog is remarkable and so are the corporate contents. All in all, it represents a new historical entity, stepping into the world of serious banking crises, stepping into the world which is internationalizing on a scale unheard of in our entire history.

It is functioning in a world which has no precedent. The best reference I could find is the remarkable book by Clyde Prestowich, president of the Economic Strategic Institute in Washington, DC, Three Billion New Capitalists.

The current trends in international finance, as well as the dislocation of the American induced monetary crisis, are creating not only the old billions of business but actually the new billions. If anything, there is more need for international investment banking and as more people work there will be more need for wealth management. These developments are not only on the multi-billion but on the multi-trillion level.

It is all done by educated and principled people.

This is the world that is opening for Evercore and its competitors.

Evercore Partners to Receive $120 Million Investment From Mizuho Corporate Bank
- Proceeds to be Used to Fund Near-term Investment Management Opportunities and General Build-out of Investment Management and Advisory Businesses.
- Two Firms Strengthen Strategic Alliance for Cross-Border M&A Advisory Services and Forge a New Alliance for Investment Management Activities.

NEW YORK and TOKYO, Aug 21, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Evercore Partners Inc. (NYSE: EVR) today announced it has entered into an agreement with Mizuho Corporate Bank, Ltd. ("Mizuho CB") pursuant to which Mizuho CB will purchase from Evercore $120 million principal amount of senior unsecured notes due 2020 with a 5.20% coupon and warrants to purchase 5,454,545 shares of Evercore Class A Common Stock at $22.00 per share, for an aggregate purchase price of $120 million in cash. In addition, Mizuho CB and Mizuho Securities Co., Ltd. (collectively, "Mizuho") have agreed, subject to the joint approval by Evercore and Mizuho of each allocation of Mizuho's capital commitment, to commit up to $150 million to be invested in Evercore-affiliated funds. Evercore and Mizuho also entered into a new strategic alliance agreement strengthening their U.S.-Japan cross-border strategic alliance announced in 2006, which will expand the M&A relationship and form a steering committee to jointly review certain advisory opportunities.

Proceeds from Mizuho's purchase of the newly issued senior unsecured notes and warrants will be used to provide Evercore with capital to fund a number of specific investment management opportunities, several of which Evercore expects to announce before the end of the year, as well as a general build-out of its Investment Management and Strategic Advisory businesses, including geographic expansion. In connection with the investment by Mizuho, a representative of Mizuho will become a member of Evercore's Board of Directors, and following closing, Mizuho will be permitted to purchase Evercore Class A Common Stock in the open market, provided Mizuho's total voting interest does not exceed 4.9% of the total voting interest in Evercore.

"We have enjoyed a strong alliance with Mizuho, and this broader relationship enables both our Advisory and Investment Management businesses to partner with a truly leading Japanese institution. Moreover, Evercore has regularly stressed its two overriding strategic objectives,&