Boutique investment bank PJT Partners road the recent M&A wave to an impressive second quarter, posting revenues of $130 million, up 20% year-over-year. The firm is rewarding its employees for their efforts, allocating a massive 72% of total revenues to the compensation pool. The average pay per head is staggering considering PJT’s size. They are growing quickly, but still have a much smaller footprint than other big-name boutiques.
PJT set aside $198m for compensation and benefits during the first six months of the year. In a recent report, the company noted that it employed 470+ people as of the end of 2017. Even if you assume the firm added 50 people over the last six months, the implication is that the average PJT employee made roughly $380K during the first half, putting them on pace to take home over $750k if the firm’s strong year continues. For the 60-plus partners, those checks will be even bigger.
A burst of M&A activity has put rainmakers at boutiques in an ideal position. Rival Evercore is on pace to pay out its 1,600-plus employees an average of around $600k for 2018. M&A bankers at bulge-bracket firms are doing well themselves, but no big bank will ever have a comp-to-revenue ratio that reaches anywhere close to 72%.
Like most boutiques, PJT Partners is hiring. It added six net partners during the first half of the year, according to the Buckingham Research Group, which likely means they made several junior hires as well to fill out their teams. The firm “remains optimistic” about recruiting during the second half of the year within advisory, according to Buckingham.
Now appears an ideal time to get your foot in the door at PJT, Evercore Moelis and other boutique rivals. It won’t be easy, though. In a recent ranking of the hardest investment banks with which to interview, boutiques accounted for the top seven spots – well ahead of the likes of Goldman Sachs and J.P. Morgan.
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