Boutique investment banks are continuing to eat the lunch of large M&A advisory players in the U.S., but they're also taking advantage of problems hitting bulge-bracket banks to bring in some top talent.
The likes of Evercore Partners, Centerview Partners, Moelis & Co., Houlihan Lokey, Guggenheim Partners, Allen & Co and Sandler O’Neill Partners have all broken into the top 20 for U.S. M&A revenue in the first half, according to data from Dealogic. This is largely because of their presence on large deals – Allen & Co and Qatalyst Partners are advising on LinkedIn's $26.2bn sale to Microsoft, for example.
These tiny shops don't covet publicity, but their presence on high-profile deals has thrust them into the limelight. And, while global investment banks struggle with low trading revenues, the fall out from Brexit and ongoing structural change, boutiques are growing.
“We’re not seeing a major hiring push from the big investment banks, but the four-, five-, six- or even up to 10-person specialty boutiques, mainly the technology- or healthcare-focused shops, have been increasingly making a push to get some of the talent that is coming down from bulge-bracket banks, either due to restructuring or bankers scared of what’s to come at their bank or looking for a new challenge,” said Cesar DeLara, a senior consultant in the investment banking practice at Selby Jennings.
In the past few weeks, PJT Partners has taken on Andrew White, an associate at Credit Suisse, while ex-Morgan Stanley banker, Tarek Aguizy, joined as a managing director in June, as did Simon Dowker, who moved from Jefferies. Su Lim, who was a vice president in Credit Suisse's New York investment banking team, signed up to Centerview Partners last month as principal, while Georgia Forbes joined its U.S. analyst programme in July.
Qatalyst Partners is also seeking to boost headcount, according to headhunters, although the majority of its U.S. employees are in San Francisco because of its tech focus.
“A technology boutique firm doing pretty well is Bois Capital, which is just getting in on the tech M&A wave and looking to build out a practice pretty quickly,” adds DeLara.
“Some senior people have become frustrated with restructuring or downsizing and how political it’s become at the big banks," says Jeff Koehler, FICC and equity sales consultant at Selby Jennings. “Compensation varies, but we work with elite boutiques that can match a candidate’s base salary and provide a lot of upside with their bonuses, and they only bring on the best – elite boutiques have a larger bonus pool for a smaller number of employees, so they’re able to attract top talent when bonuses not as strong across the industry as they were two or three years ago.”
Britain's vote to leave the EU is also throwing up opportunities for smaller banks to pick up talent, says DeLara. These are primarily U.S. headquartered banks looking to bolster their headcount in Canada or Asia and are seeking cross-border deal experience.
"Those bankers who lack international or cross-border deal experience will find themselves in a tough place if they become a casualty of Brexit," DeLara said.
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