After a sluggish start in January, the market for initial public offerings picked up steam in the first quarter amid an uptick in prices.

Companies raised $7.3 billion, 25% more than in the year-earlier quarter.

Securities firms owned by commercial banks lead-managed $735 million of the deals-10% of the market. Three banking companies, Bankers Trust New York Corp., NationsBank Corp., and BankAmerica Corp., bought firms active in the IPO business last year.

"The last six weeks have been particularly good," said David DiPietro, head of equities and convertible securities at Bankers Trust New York Corp.'s BT Alex. Brown. "While it hasn't been frothy, it's a fairly rational market with only a handful of deals skyrocketing in price after the transaction."

BT Alex. Brown led the bank-owned underwriters, finishing seventh and capturing 4% of the IPO market, with $293 million in proceeds. The firm was in ninth place, with $181 million, a year earlier.

Other banking companies among the 15 largest lead managers were J.P. Morgan & Co., NationsBank, and BankAmerica.

The overall leader was Merrill Lynch & Co., which raised $1.5 billion- nearly double its closest competitor. The biggest gainer was Friedman, Billings, Ramsey & Co., an Arlington, Va.-based securities firm that opened its doors less than a decade ago.

It shot to second place, with $802 million in proceeds, from 20th place a year earlier. If money raised by closed-end funds were excluded, Friedman Billings would take the top spot.

Co-founder Eric F. Billings, who is also Friedman Billings' vice chairman and chief operating officer, attributes its success to its small size, which he said helps to keep it nimble. But Mr. Billings did not rule out the possibility of selling his firm, especially in today's climate of financial megamergers.

"We've been approached by several banks," he said.

He added that his executives believe the company will grow so much in the next three to five years that any offer based on the present valuation would be unacceptable.

"But we would truly look at anything," he said.

Pittsburgh-based PNC Bank Corp., the nation's 13th-largest bank holding company, has a 5% equity stake in Friedman Billings.

Among bank-owned firms, J.P. Morgan increased market share modestly but NationsBanc Montgomery and BancAmerica Robertson Stephens each lost some share.

Harold Schroeder, a bank equity analyst with Keefe, Bruyette & Woods Inc., said big banks' move into equities was more defensive than an offensive.

"That's not to say they're not looking for revenue growth, which is not going to come from cost savings but from synergies," Mr. Schroeder said. "But what they're really doing is staking out their client base in middle- market corporate America at the same time the bigger players are moving downstream."

During the first quarter, the IPO market got a boost from reverse buyouts-offerings by companies previously taken private by leveraged buyout firms. Mr. DiPietro said that's one of the biggest changes he has seen at Alex. Brown since the Baltimore-based securities firm was bought last fall by Bankers Trust, the nation's seventh-largest bank holding company.

Bankers Trust financed many of these leveraged buyouts and has since referred the buyout shops to the investment banking arm of its parent company, he said.

Friedman Billings, meanwhile, profited from a boom in IPOs by real estate investment trusts: All four companies that Friedman Billings brought public in the last quarter were REITs.

"Capital tends to flow in certain industries more powerfully. A year ago it was specialty finance," Mr. Billings said. "Now the real estate industry is literally being securitized in every aspect, in equity and in debt tranches."

In February, Friedman Billings brought Capital Automotive public with a $350 million offering. In August, Friedman provided seed money for the REIT, which buys property owned by automobile dealerships then leases it back.

For the future, market observers said they expect the global energy sector to spawn a surge of IPOs, as competitors rush into markets that are being deregulated overseas.

Some also said they are looking for more deals in the domestic telecommunications and broadcast markets, which has historically relied on high-yield debt for their financing. As they mature, newer local and long- distance phone companies are showing more interest in going public.

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