Boutique trading firms as well as investment banking firms were all the rage just two years ago. We've noted that the conventional wisdom at the time was bulge bracket firms were debilitated by the financial crisis and a recovery would take many years, especially during a tough regulatory climate. But it's no secret that trading boutiques are suffering right now, as the bulge bracket firms reassert themselves.

What about boutique investment banks? Boutique bellwether Greenhill & Co. just posted a bombshell of an earnings reports, 6 cents a share for the fourth quartervs. analysts' estimates of 52 cents a share.

The compensation ratio for the quarter was 73 percent. Fees from deal advisory fell 40 percent. For the year, however, growth in advisory revenue was 17 percent. Still, the stock tumbled.

The big question is whether this is a harbinger of things to come as the big boys of the merger advisory industry focus on what seems like a terrific opportunity in 2011.

The firm feels it is well positioned to capitalize on what should be a banner year, officials said in a statemen. They noted that Greenhill announced 12 transactions in the month of December and carried several earlier assignments into the new year that had been expected to close in 2010.

For more:
- here's the results (.pdf)

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The lessons of Greenhill & Co.
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