Boutiques Have Snatched M&A Market Share From Banks

Boutiques are small specialist M&A firms or banks with a focus on a specific region / sector. They tend to be small (few dozen to a few hundred employees) … and they have been taking a lot of business from the big M&A banking giants according to a report by Dealogic quoted in a City AM article today.

While the report covers mainly mid-cap firms (minimum deal value in the tens of millions), the same does seem to be happening with the low mid-market as well with boutique corporate finance firms gaining market share at the expense of the larger players.

According to Dealogic, which tracked 2,703 UK deals during the year (value = $205.3bn), boutiques may have advised on just a small fraction – 8 % (or 210 deals) – but these accounted for 54% in value terms.

Suspicions that bankers are leaving larger firms and taking clients with them to newly founded boutiques have been dismissed as false as many of the deals involved new clients the boutique attracted in their own right. “Adverse sentiment” against banks since the 2008 financial crisis is also suggested at one explanation for the tectonic shifts happening. It’s partly about trust – clients not trusting banks – and partly because talented people from the banks have left to start their own firms.

Unfortunately, the article starts with praising one firm – Robey Warshaw- and ends with a mention of firm again leaving an uncomfortable suspicion that the whole piece is some sort of informercial paid for by Robey Warshaw rather than any serious attempt to explain the market shifts. Read the article here.