A recent article titled What Does an M&A Boutique Do When Deals Dry Up? published in The Financial Times reported that “fees from M&A are falling sharply as cautious corporate clients focus on weathering the recession. That leaves boutiques exposed, as they lack the big trading and capital markets businesses that have picked up the slack at diversified rivals such as Goldman Sachs and JPMorgan Chase.” The truth of the matter is, from where we sit as a financial technology provider to hundreds of investment banks, these concerns only continue to grow as the COVID-19 pandemic continues (and frankly shows no sign of slowing).
Now, every investment bank has their own operating model and forecasting abilities under the microscope: “When the M&A spigot dries up for a while – and truth be told, we don’t know how long that will be – it will become more apparent how well each business model weathers that,” said Paul Taubman, chief executive of the advisory firm PJT Partners, a DealCloud client. Over the past several months, it’s become clear that some firms – especially those with a strong technology and data infrastructure, as well as those with a prominent restructuring practices – have risen to the challenge.
In the post-recession world (that of 2008, not the one we’re currently in), small investment banking firms (boutiques) are more frequently given a fair shot at fee generation given the regulatory, profitability, and personnel challenges the big banks are facing. In fact, Refinitiv recently reported that the top 15 boutiques grew their collective share of M&A fees from 11.8 per cent in 2005 to 18.2 per cent just five years later.
So, how exactly will investment banks – especially boutiques – weather this storm and prove they are more than just deal shops? Download our guide to learn our top five tips.
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Struggling to make these kinds of operational changes? Tired of trying to retro-fit your generic CRM platform for the unique needs of an investment banking team? Schedule a demo with the DealCloud team today, and we will show your firm how we’ve helped hundreds of boutique firms become essential to their clients.