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A boutique investment bank is an investment bank that specializes in at least one aspect of investment banking, generally corporate finance, although some banks' strengths are retail in nature, such as Charles Schwab. Of those involved in corporate finance, capital raising, mergers and acquisitions and restructuring and reorganizations are their primary activities. Boutiques usually provide advisory and consulting services, but lack capacity to provide funding. After the Gramm–Leach–Bliley Act, investment banks have either had a retail deposit base (JPMorgan Chase, Citi, Bank of America) or have had funding from overseas owners or from Wealth Management arms (UBS, Deutsche Bank, Morgan Stanley). Boutique banks on the other hand often turn to other banks to provide funding or deal directly with capital rich firms such as insurers to provide capital for deals.
Boutique investment banks generally work on smaller deals involving middle-market companies, and usually assist on the sell or buy-side in mergers and acquisitions transactions. In addition, they often specialize in certain industries such as media, healthcare, industrials, technology or energy. Some banks may specialize in certain types of transactions, such as capital raising or mergers and acquisitions, or restructuring and reorganization. Typically, boutique investment banks may have a limited number of offices and may specialize in certain geographic regions, thus the moniker 'regional investment bank'. Traditionally, boutique investment banks are specialized in certain fields of corporate finance and thus not full-service. However, the term is often used for non-bulge bracket full-service investment banks, banks that are also known as middle-market investment banks. [1]
During 2014, The Financial Times [2] The New York Times , [3] and The Economist [4] all published favorable articles regarding the growing trend of corporations to hire boutique investment banks. Reasons cited included their absence of conflicts, independence, and skill of one or a relative few individuals. The discrediting of traditionally conflicted Wall Street investment banking firms, especially those listed as full-service or conglomerates on the list of investment banks, due to their role in the creation or exacerbation of the Great Financial Crisis, is cited as a primary reason for the ascendancy of these boutique firms. However, advances in technology which permit the outsourcing of all non-core aspects of the firm have also been cited as a cause of this David versus Goliath phenomenon.
Working at boutique investment banks generally requires working longer hours than at larger banks, even though the majority of boutiques are founded and led by former partners at large banks. [5] [6]
As larger investment banks were hit hard by the Great Recession of the 2000s, many senior bankers left to join boutiques, some of which largely resemble the partnerships that ruled Wall Street in the 1970s and 1980s. Boutique investment banks took a greater share of the M&A and advising market at the same time. [7]
Large, prestigious boutique firms include Evercore, Lazard, Centerview Partners, PJT Partners, Rothschild & Co and Moelis & Company. [8] While these may be full-service and international in scale, they are significantly smaller than and do not offer the breadth of products and services of bulge bracket investment banks.
Boutique investment banks may be engaged in providing one or more of the following services: [9]
The following is a partial list of notable boutique investment banks: [10] [11]
Investment banking pertains to certain activities of a financial services company or a corporate division that engages in providing advisory-based services on financial transactions for clients, such as institutional investors, corporations, and governments. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by underwriting or acting as the client's agent in the issuance of debt or equity securities. An investment bank may also assist companies involved in mergers and acquisitions (M&A) and provide ancillary services such as market making, trading of derivatives and equity securities, FICC services or research. Most investment banks maintain prime brokerage and asset management departments in conjunction with their investment research businesses. As an industry, it is broken up into the Bulge Bracket, Middle Market, and boutique market.
CIBC Capital Markets is the investment banking subsidiary of the Canadian Imperial Bank of Commerce. The firm operates as an investment bank both in Canadian and global equity and debt capital markets. The firm provides a variety of financial services including equity and debt capital market products, mergers and acquisitions, global markets, merchant banking, and other investment banking advisory services.
Wasserstein Perella & Co. was a boutique investment bank established by Bruce Wasserstein, Joseph R. Perella, Bill Lambert, and Charles Ward in 1988, former bankers at First Boston Corp., until its eventual sale to Dresdner Bank in 2000 for some $1.4 billion in stock. The private equity business of the investment firm was not included in the sale and was to be sold off to existing Wasserstein shareholders.
Mediobanca is an Italian investment bank founded in 1946 at the initiative of Raffaele Mattioli and Enrico Cuccia to facilitate the post-World War II reconstruction of Italian industry. Cuccia led Mediobanca from 1946 to 1982. Today, it is an international banking group with offices in Milan, Frankfurt, London, Madrid, Luxembourg, New York and Paris.
Evercore Inc., formerly known as Evercore Partners, is a global independent investment banking advisory firm founded in 1995 by Roger Altman, David Offensend, and Austin Beutner. The firm has advised on over $4.7 trillion of merger, acquisition, and restructuring transactions since its founding. Evercore is widely considered one of the most prestigious and elite investment banking advisory firms.
Panmure Gordon is a UK based investment bank. It provides a full range of services including investment banking, trading, research and sales with distribution to the UK, Europe and the US. Panmure Gordon has 150 UK listed corporate clients, over 400 institutional clients, provides research on over 200 companies, makes markets in over 400 stocks and offers broad coverage of publicly listed companies.
Canaccord Genuity Group Inc. is a global, full-service investment banking and financial services company that specializes in wealth management and brokerage in capital markets. It is the largest independent investment dealer in Canada. The firm focuses on growth companies, with operations in 10 countries worldwide and the ability to list companies on 10 stock exchanges. Canaccord Genuity, the international capital markets division, is based in Canada, with offices in the US, the UK, France, Germany, Ireland, Hong Kong, China, Singapore, Dubai, Australia, Barbados, and The Bahamas.
Trimaran Capital Partners is a middle-market private equity firm formerly affiliated with CIBC World Markets. Trimaran is headquartered in New York City and founded by former investment bankers from Drexel Burnham Lambert. Trimaran's predecessors were early investors in telecom and Internet businesses, most notably backing Global Crossing in 1997. Trimaran also led the first leveraged buyout of an integrated electric utility.
Guggenheim Partners, LLC is a global investment and advisory financial services firm that engages in investment banking, asset management, capital markets services, and insurance services.
Moelis & Company is a global investment bank that provides financial advisory services to corporations, governments, and financial sponsors. The firm advises on strategic decisions such as mergers and acquisitions, recapitalizations and restructurings and other corporate finance matters. Moelis is widely considered one of the most prestigious investment banking advisory firms and has advised on more than $4 trillion in transactions since its inception.
UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. Headquartered in Zürich, it maintains a presence in all major financial centres as the largest Swiss banking institution and the largest private bank in the world. UBS client services are known for their strict bank–client confidentiality and culture of banking secrecy. Because of the bank's large positions in the Americas, EMEA, and Asia Pacific markets, the Financial Stability Board considers it a global systemically important bank.
John P. Costas is an American businessman, banker, and trader. He is the former chairman and CEO of UBS Investment Bank, where he oversaw the growth of the Swiss bank's investment banking franchise globally from 2000 to 2005. From 2005 through 2007, Costas was the chairman and CEO of Dillon Read Capital Management, a UBS proprietary trading unit and alternatives management company.
Blair W. Effron is an American financier. Effron co-founded Centerview Partners, a leading global investment banking firm based in New York City. Centerview has offices in London, Paris, Chicago, Los Angeles, Palo Alto and San Francisco. The firm provides advice on mergers and acquisitions, financial restructurings, valuation, and capital structure to companies, institutions and governments.
Centerview Partners is an American independent investment banking firm. Centerview operates primarily as an investment banking advisory firm. Centerview has 60 partners and 400 professionals with expertise across a wide range of industries, geographies, transaction structures and sizes.
Turquoise Partners is a privately-owned international financial services group based in Iran which was established in 2005. Turquoise provides a range of financial services to foreign and domestic clients. Turquoise was in 2014 the largest manager of foreign portfolio investment on Iran's capital markets.
Henry F. Owsley is an American investment banker and the chief executive officer and founder of Gordian Group LLC, an investment bank and financial advisory firm. He is also a managing partner of Bacchus Capital Management.
An independent advisory firm is an investment bank that provides strategic and financial advice to clients primarily including corporations, financial sponsors, and governments. Revenues are typically generated by providing deal-specific advice related to mergers and acquisitions and financing. The WSJ noted in January 2016 that "boutique is a fuzzy label, defined as much by what these firms do as what they don’t do ."
PJT Partners, Inc. is a global advisory-focused investment bank, founded in October 2015 as part of The Blackstone Group's spin-off of its financial and strategic advisory services businesses. The firm was founded by Paul J Taubman after his 30-year tenure at Morgan Stanley, where he served as Global Head of Mergers and Acquisitions, Global Head of Investment Banking and until the end of 2012, Co-President of the Institutional Securities Group, which included Investment Banking as well as Sales and Trading.
Asante Capital Group is a private equity advisory firm with offices in London, New York City, Hong Kong, and Munich. The firm is active across primary capital raising, secondaries advisory and direct investment transactions. Asante partners with fund managers globally and across the strategy spectrum including buyout, growth, venture, private debt, infrastructure and real assets. To date, Asante has assisted the placement of over 100 funds and transactions with more than 60 notable investment firms, including Welsh Carson Anderson & Stowe, Chequers Capital, Creandum, LLR Partners, Montagu Private Equity, One Equity Partners, Summit Partners, NIO Capital, Whitehorse Liquidity Partners, and others.
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