Annual Report for the year ended 31 December 2008

Institutional Sales & Sales Trading
Evolution securities’ uK Equities sales team has a strong franchise
across the uK listed markets from AiM to FTsE 100 and is a significant
participant in the mid cap and small cap markets, in both primary and
secondary issues. Our fundraising record is well respected throughout
the industry, and our depth of expertise and wide range of international
contacts enables the department to provide services to a broad range
of uK, European and us based investors. Equally important is that our
sales teams are conduits for passing on the message of our research
analysts and the corporates that we advise on to our various institutional
relationships.
As a result of the prevailing economic conditions the performance from
these teams in 2008 has suffered with total secondary commission
income decreasing by 23% to £12.7m (2007: £16.4m). This was in face
of the FTsE 100 index falling by 36%, AiM index falling by 65% and the
small cap index falling by 54%.
Equity Market Making
With 14 market makers covering a total of 772 stocks, Evolution securities
has one of the largest market making operations in the City of london.
The team makes markets in stocks from a variety of sectors ranging
from AiM and small cap right through to the FTsE 100, providing real
facilitation and execution services to both institutional and retail clients.
CHIEF ExECUTIVE’S REPORT CONTiNuED
INSTITUTIONAL INVESTmENT BANKING
06 THE EvOluTiON GROup plC ANNuAl REpORT & ACCOuNTs 2008
in 2008, Evolution securities reduced the number of stocks in which we
made markets to a total of 772 stocks (2007: 916 stocks), whilst still covering
the entire FTsE 250 and FTsE 100. 2008 also saw a greater focus on
the efficient use of capital away from some of the smaller capitalised
and less liquid stocks to larger capitalised companies. This matched the
greater research and sales coverage in these stocks. performance of
our market making operations, has been impacted by significant falls in
all uK equity indices and also the significant deterioration in the underlying
liquidity of quoted companies which made 2008 the most difficult year
that this operation has ever seen. its performance, against this backdrop,
has been good when compared to FTsE falls.
Primary market activities
As previously mentioned, 2008 was an exceptionally tough year for corporate
finance activity. Evolution securities participated in transactions raising
in excess of £470m during 2008 (2007: £2.9bn). Fundraising activities
included 20 transactions from existing listed clients (2007: 41 transactions)
and one of the largest ipOs of the year (2007: five ipOs), raising in total
£157m (2007: £437m).