Late Lunchtime Links: This merely confirms that M&A bankers are best off in boutiques

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David and Goliath

M&A bankers may prefer David to Goliath (Photo credit: More Good Foundation)

Yesterday it became apparent that EADS and BAE Systems are in 'advanced talks' to seal a £29bn merger. Such a deal might generate fees of around 0.2% of its value - equivalent to around £58m.

So, who is advising on this mega-deal? Is it the mega-banks? Yes. And no.

BAE is being advised by Morgan Stanley and Goldman Sachs. But it is also being advised by Gleacher Shacklock. EADS is being advised by BNP Paribas and Lazard. But it is also being advised by Evercore.

As Breaking Views notes, the boutiques are in on the act because they have the relationships. "Advisers such as Evercore’s Bernard Taylor and Gleacher Shacklock’s Tim Shacklock have been counselling these companies for donkey’s years," Breaking Views points out.

As Anshu Jain said earlier this week and as we noted yesterday, M&A bankers in big banks are a cost centre. M&A bankers demand high pay even when M&A revenues aren't forthcoming and unfortunately FICC businesses can no longer subsidise them. By comparison, large boutiques like Evercore have a far leaner cost base and are performing well even in this market.  The downside to working in a lean boutique is always that as a junior you will be worked even harder than in an investment bank. The upside is that you'll get better exposure to landmark deals. And if you're a senior banker you'll get to eat a lot more of what you kill and won't be compelled to cross-sell cash management systems.

Meanwhile:

Moore Capital has made 10-15 people redundant, out of a total of 426. (Bloomberg) 

Redundancies may be coming at Investec. (Bloomberg)

Nomura’s American equities chief appears to be leaving, despite saying only recently that his was a big growth area. (Bloomberg) 

There is no meeting of minds between the hedge fund managers and farmers of Zug. (Also Bloomberg) 

You might want to become a physical metals trader. (Financial Times) 

Greg Smith’s book is comig out on October 22nd. (Amazon) 

But was Mr. Smith, a midlevel derivatives salesman who failed to become a managing director and had no one reporting to him, privy to Goldman’s inner workings? (DealBook)  

There seems something suspect about the Economist’s MBA rankings. (Poets and quants)

in order for the industry collectively to have hit its cost of equity in the past year, it would need to have found another $32bn in pretax profits down the back of the sofa. (William Wright) 

McDonald's highest calorie item is not a burger. (Wall Street Journal) 

 

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