Why a heavily hyped investment bank is MIA

NEW YORK, Fortune -- If boutique investment banks could be measured on glitz alone, 10-month-old Perella Weinberg Partners LP undoubtedly would be leading the way.

Just look at all the sparkling stats: Since inception last June, the firm has raised $1.1 billion in commitments from the likes of Gulf Investment Corporation (an investment company owned by the six Gulf states), Mitsubishi UFJ Securities and the Getty family. It has paid through the nose for gorgeous offices in the prestigious GM building on Manhattan's Fifth Avenue as well as Grafton Street in London's Mayfair. And it has wasted little time getting people to move in, hiring 71 professionals and close to 100 employees in total, including - in addition to fabled investment banker Joseph Perella and Peter Weinberg, grandson of the man who helped build Goldman Sachs (Charts, Fortune 500) - former SEC Chairman William Donaldson and Terek Abdel-Maguid, Morgan Stanley's (Charts, Fortune 500) former global head of investment banking.

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But deals, not dazzle, are the raison d'etre for all of this empire building, and judged on that front, PW's first 10 months have been rather lacking. In a torrid M&A season, with a record $3.8 trillion in deals announced in 2006 and another $1.7 trillion so far this year, according to Dealogic, PW has won "official" credit for exactly three, worth a total of $22.2 billion (the value of the deals themselves, not the fees, which are much less), with another deal rumored.

The numbers have not inspired much in the way of teeth-gnashing among competitors, all of whom say they expected much more from the firm's vaunted Rolodexes. "I have not seen them once on anything that I've been doing, other than one situation where their role is beyond secondary or tertiary," says one very high-level banker. "They're not playing at a level that Joe expected." Says another direct competitor: " I don't think it's looking good for Joe, and I say this as a friend. They're invisible." PW refused comment.

In part, it's a question of expectations. Perella, after all, is legendary on the Street for his work at First Boston, Morgan Stanley and his first try at going it alone, Wasserstein Perella; after leaving Morgan Stanley in 2005, he personally advised MBNA in the $36 billion Bank of America (Charts, Fortune 500) deal.

Perhaps it's just a matter of time; Two of PW's deals - the $15 billion merger of European property outfits Rodamco Europe and Unibail Holding, and the $2.2 billion sale of tanker company OMI - have landed in the past month alone. The deals have finally vaulted the company into the M&A league tables - banking's equivalent of the sports pages, with statistics that everyone consumes obsessively while also claiming they're bunk - at No. 47 out of 50 on Dealogic's list. Yet boutique competitors Evercore, Greenhill & Co and Centerview Partners came in at Nos. 19, 20 and 29, respectively, with a total of 71 deals among them.

Schadenfreude aside, it is early going yet - not even a year - and the recent spate of deals does suggest that there may be more to come, particularly in Europe and the Middle East, where the firm's contacts are said to be stellar. The firm has also been busy building a presence that includes an asset management business and a restructuring advisory service, both businesses that should help them if the current M&A frenzy ever comes to a close.

But PW's Field of Dreams approach is also a business model that is quite different from that of other boutiques, which started small and only expanded after winning some big deals. "We largely grew organically," says Robert Greenhill, founder, chairman and CEO of Greenhill & Co., a rival boutique that opened its doors in 1996 and today has over 200 employees. Of PW's big rampup, he says, "That would not have been something I would have done."

Perhaps the most relevant comparison is to Centerview Partners, another new boutique whose name partners include Robert Pruzan, once president of Wasserstein Perella, and Stephen Crawford, who was briefly co-president of Morgan Stanley until his boss and supporter, Philip Purcell, was pushed out (Perella quit the firm two weeks after Crawford's promotion). Open for business a month after Perella, but with a lot less fanfare, Centerview has done just four deals, but one of them is the $46 billion spinoff of Kraft (Charts) by Altria, and that's gotten them plenty of attention with a lot smaller overhead - just four partners and 30 professionals.

"We're having a blast," says Crawford. "The advisory business could not be stronger. It was a fortuitous time to start a boutique." So one would think.

Adam Lashinsky contributed to this story