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.