Entering text into the input field will update the search result below

Boutique M&A Advisory Firms Challenge Large Investment Banks

Jul. 29, 2014 4:44 AM ETJPM, MC, EVR, MS, GS
Alok Misra profile picture
Alok Misra


  • Boutiques have cornered about 15% of the $4.4 billion of M&A advisory fees U.S. companies have paid so far this year.
  • If the M&A markets soften, big banks may be able to use their scale and financial muscle to put pressure on boutiques.
  • The lessons from the financial crisis of 2008 indicate that big banks may also stumble in a weak M&A environment, giving boutiques the advantage.

"In the big business of advising on mergers and acquisitions, smaller is increasingly better. A group of small M&A-advisory shops, known as boutiques, have muscled in on the signature Wall Street offering and now routinely take lucrative deal assignments from the big banks that have for years dominated the business," according to the Wall Street Journal.

The M&A market is heating up overall, but boutiques, in particular, have significantly increased their market share. According to the article, "At a time when other profit engines at the big banks are sputtering, boutiques so far this year have taken about 15% of the $4.4 billion of fees U.S. companies have paid for M&A advice, according to Dealogic. That is nearly twice their share in 2008, before the financial crisis battered big banks' reputations and sagging pay and morale prompted top stars to depart."

Top bankers are, indeed, partly responsible for the trend. After leaving large investment banks like Goldman Sachs (GS), Morgan Stanley (MS) and JPMorgan Chase (JPM), they also sometimes take mega deals with them. Two brothers, Michael and Yoël Zaoui, are advising the French cement maker Lafarge in its $60 billion merger with another giant cement maker, Holcim, of Switzerland, according to New York Times. Robertson Robey Associates, a microfirm, advised Grupo Corporativo Ono of Spain in its $10 billion acquisition by Vodafone. The M&A advisory business very dependent on relationships and trust, it is hardly surprising that rainmakers at large firms would find it lucrative to strike out on their own.

The fact that boutique banks are also subject to fewer conflicts of interest, also helps. They are solely focused on M&A advisory, as opposed to distractions like proprietary trading, lending or cross-selling fancy financial instruments. "With scrutiny of deals increasing from shareholders and their lawyers, boards are often

This article was written by

Alok Misra profile picture
Alok Misra is a co-founder of Navatar, the financial services industry cloud provider. He brings several decades of technology leadership experience, with both consulting and tech firms, and is one of the top cloud experts today. Alok spent his early career at Deloitte and PwC, before founding Navatar. He is regularly featured in publications such as Wired, Wall Street & Technology and Seeking Alpha, and is the author of several whitepapers as well as a recent book, on the evolution of technology in financial services. He also serves on the board of a United Way.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.