Bankers and Bitcoin
2022.12.19 10:47
Bankers and Bitcoin
Budrigannews.com – Deal advice is now a highly competitive market. When rainmakers consider their next steps in a weaker environment for mergers and acquisitions, the situation makes things more difficult. In 2023, it will be much more challenging to make the well-known transition from Wall Street to Boutique Boulevard.
When times get tough, investment bankers’ entrepreneurial spirit often strikes when their mega-bank employers start cutting back on staff or restricting access to the balance sheet. This kind of challenge is probably coming; Early in December, analysts at Goldman Sachs (GS.N) predicted that M&A volume would decrease by 20% over the next year.
It seems like a good idea to hang a shingle because of the lucrative industry for independent advisors. According to data from Refinitiv, two decades ago, companies like Lazard (LAZ.N) and Evercore (EVR.N) only received about 14% of the fees for mergers. By the time the 2008 global financial crisis struck, their share had risen to nearly 20% of a much larger pool. They now claim 36% of the roughly $35 billion that clients had paid out in 2022 through the middle of December, which is roughly the same percentage as the top five banks.
It’s simple to understand how companies like Centerview, founded by Blair Effron, Robey Warshaw, and Ken Moelis’s eponymous firm came to be. 10 years prior, Barclays (BARC.L), Credit Suisse (CSGN.S), Deutsche Bank (DBKGn. DE), Nomura (8604.T), and UBS (UBSG.S) accounted for 17 percent of the global market together. Their share had fallen below 9% by the end of 2022. M&A business was also lost to other regional banks in the United States, Europe, and Canada.
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Because of the intense level of competition, boutiques may even be stealing work from one another. In the Refinitiv fee league tables, Greenhill (GHL.N) and Houlihan Lokey (HLI.N) are among those that have fallen. It will be difficult for newcomers to attract customers from established businesses like Goldman Sachs and JPMorgan (JPM.N), as well as from smaller establishments that have emerged as popular consignees over the past 15 years or so.
To get their names in the door, only deal mavens with a unique specialty will be successful. Aryeh Bourkoff’s LionTree targeted media moguls, Frank Quattrone and his Qatalyst captured segments of Silicon Valley, and Steve McLaughlin captured a portion of the financial-technology M&A market with his FT Partners. Byron Trott’s BDT carved out a place for itself with family-owned businesses. Investment bankers who don’t have those kinds of industry- or geographic-specific relationships may just find themselves spending more time with their families.
Free venture banks, for example, Lazard and Evercore acquired 36% of worldwide consolidations and acquisitions charges in 2022 through Dec. 12, contrasted and 34% for the main five banks, as per Refinitiv information.
