There was a time
for bankers who work
on mergers and acquisitions
where big was beautiful.
At Bulge Bracket banks, such
as Citigroup, Deutsche Bank,
JPMorgan Chase, and Lehman
Brothers, the name of the game
was size.
Armed with a big balance
sheet, the top advisory bankers
in London and New York hunted
deals with their boardroom
relationships, while
also having the ability
to offer their clients
financing packages.
But this all changed after
the financial crisis.
Post-crisis regulations
that were designed
to prevent risky trading
and lending made life a lot
more bureaucratic
and a lot less fun.
Pay packages and perks were
also more tightly controlled.
That is when the exodus began.
Bankers who would spend
a lifetime at places
like Morgan Stanley,
UBS, and Goldman
Sachs, quick to start
their own boutique firms.
This new generation
of boutique banks
is nostalgic for the
old ways of banking
- small partnerships, where a
select group of senior bankers
mostly own and operate the firm.
Critics of the big banks say
this is a superior model.
Risk-taking is likely to be
more prudent when partners
have more skin in the game.
Free from the shackles of the
big banks, where even your
every email is
monitored by compliance,
those succeeding in boutiques
say they're having more fun
and they're once again making
tens of millions of dollars.
At the turn of the century,
the top five mega banks
made about 50 per
cent of M&A fees,
while boutiques accounted
for 15 per cent.
Today, they control
anywhere from 30 per cent
to 35 per cent of M&A fees.
The likes of Goldman,
JPMorgan, and Morgan Stanley
have survived the
rise of the boutiques.
But for many other famed
names in the world of banking,
such as the European
houses, the M&A game
has become more difficult
as the boutiques have risen.
