When you hear the word ‘boutique,’ you likely think small and specialized. In the M&A world, size may soon no longer be a defining factor.
M&A activity is rampant. Global deal volume as of last week tipped north of $1.75 trillion, up a massive 75% year-over-year. That’s the most since 2007. While the big boys are doing well for themselves, garnering the top six spots in the latest global M&A league table, boutique firms are making their presence felt like never before.
Six boutique advisory firms climbed into the top 20. Four of them – Centerview Partners, PJT Capital, Evercore Partners and Perella Weinberg – own greater market share than UBS, for example.
And boutiques aren’t just picking up the scraps left by large bulge bracket banks. Paul Taubman, the former Morgan Stanley rainmaker who recently launched his own boutique, advised on Comcast’s $45 billion pending acquisition of Time Warner Cable, for example, when he was virtually just one man with a small back office staff.
There are a few reasons for the recent success of boutique advisors. One is the fertile market, which is a tide that’s lifting all boats. Another reason, astutely pointed out by the Wall Street Journal, is that boutiques don’t have to worry about any claims over perceived conflicts of interest born from their other businesses.
One recent example involves JBS, a meat producer that was looking to outbid a rival in an acquisition offer. The company eventually fired Morgan Stanley and J.P. Morgan as bond underwriters in a separate deal after learning that the banks were helping Tyson Foods with its competing bid.
Boutiques don’t have to share such a worry. But they may be stressed over finding enough desk space for new employees. Boutique firms like Moelis and Greenhill are said to be hiring, as is Paul Taubman, who just poached a third former colleague from Morgan Stanley. Others are thinking about going public or bringing in fresh capital to spur growth.
In short, it’s a good time to be knocking on the door of a boutique advisory firm.
Private equity giant Blackstone is planning a hedge fund that will require “several teams” of traders. Plus, Deutsche Bank is hiring debt and equities execs, and Goldman remains stubbornly bullish in fixed income.
It’s nearly over. BNP Paribas will reportedly settle with U.S. authorities over its alleged dealings with sanctioned countries. The French bank will plead guilty to charges, fork over nearly $9 billion in fines and temporarily lose its ability to clear certain U.S. dollar transactions, though that particular penalty won’t kick in until 2015.
BNP’s settlement with regulators will likely result in several demotions, clawbacks and cuts in pay. About two-dozen bankers have already been fired.
Deutsche Bank has just unveiled its 2013 human resources report in which it reveals a lot of data about headcount and pay at the bank last year. Here’s what you need to know.
Morgan Stanley Chief Executive James Gorman isn’t loved or revered by the bank’s employees, but they do seem to respect him, at least according to one reporter. Just make sure you aren’t in the room when he clears his throat.
Activist investor Nelson Peltz just took a massive stake in BNY Mellon. Peltz is looking to create more shareholder value, which usually coincides with cost cutting and selling or spinning off assets.
Bridgewater Associates has scrapped its plans to move its headquarter to Stamford, CT.
Buzz Around the Office
What does the word ‘bro’ mean? Well, that completely depends where you reside. In Manhattan, it means you’re an investment banker, you respect Alec Baldwin and you will marry a woman named Claire, who you’ll eventually divorce for a younger girl named Madison.
Quote of the Day: “Dick, if you want me to sell $5 bills for $4.95, I can get a long line down sixth avenue.” – what former Morgan Stanley CEO John Mack reportedly said to Dick Fisher about the truth around market share