M&A is not dead. So says a new report from the Boston Consulting Group (BCG), which predicts that M&A bankers' pockets will carry on being lined for the indefinite future as corporates engage in strategic M&A and private equity funds spend their war chests. This should be good news for senior M&A bankers at the likes of Moelis & Co. whose generous pay stands to become more generous still.
In 2015, Moelis & Co. employed 17 partners ('members') at its office in London. In the 12 months ending 31st December 2015 these partners generated £62m ($81m) in revenues (£3.6m per head). From this, Moelis' 'members' earned a total of £8.5m, or £500k each as a proportion of the firm's profits were allocated back to them.
Alongside these 17 partners, Moelis employed 109 other staff. In total, its entire 126 London employees were paid salaries and wages of £39m last year, an average of £309k ($405k).
The implication is that Moelis' partners/members each earned (at least) £309k in salary, plus their £500k profit share. Working for a top corporate finance boutique clearly pays.
It doesn't pay as much, however, as working for a top London hedge fund. Major funds like Brevan Howard and Odey Asset Management have historically paid their partners millions each year. However, major funds like Odey and Brevan are going through a difficult time as investors pull funds, whereas if BCG is right then boutiques like Moelis are well-placed to benefit from corporate re-positioning. In the circumstances, earning £809k year at an M&A boutique looks a lot safer than earning multiples of that at a macro hedge fund.