Independent advisory firm
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An independent advisory firm (sometimes less accurately called an advisory boutique) is an
investment bank Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...
that provides strategic and financial advice to clients primarily including corporations, financial sponsors, and governments. Revenues are typically generated by providing deal-specific advice related to
mergers and acquisitions Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorpt ...
and financing. The WSJ noted in January 2016 that "boutique is a fuzzy label, defined as much by what these firms do (mostly give M&A advice) as what they don’t do (trading, lending, much in the way of underwriting)."


History


1800s: Early history

Rothschild Rothschild () is a name derived from the German ''zum rothen Schild'' (with the old spelling "th"), meaning "to the red shield", in reference to the houses where these family members lived or had lived. At the time, houses were designated by signs ...
was founded in the
City of London The City of London, also known as ''the City'', is a Ceremonial counties of England, ceremonial county and Districts of England, local government district with City status in the United Kingdom, city status in England. It is the Old town, his ...
in 1811. The largest independent firm,
Lazard Lazard Inc. (formerly known as Lazard Ltd and Lazard Frères & Co.) is a financial advisory and asset management firm that engages in investment banking, asset management and other financial services, primarily with institutional clients. It i ...
, got its start in 1848 and only went public in 2005 under the leadership of
Bruce Wasserstein Bruce Jay Wasserstein (December 25, 1947 – October 14, 2009) was an American investment banker, businessman, and writer. He was prominent in the mergers and acquisitions industry, credited with working on 1,000 transactions with a total value ...
, who unified its disparate branches.


1980s: New players established

In September 2015 the FT wrote, "The concept of an advisory boutique dates back to the 1980s, when some of Wall Street’s biggest names ditched established banks to set up their own firms — often after legendary bust-ups. Peter Peterson and Stephen Schwarzman quit
Lehman Brothers Lehman Brothers Inc. ( ) was an American global financial services firm founded in 1850. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, and Merril ...
after an epic power struggle to start the
Blackstone Group Blackstone Inc. is an American alternative investment management company based in New York City. It was founded in 1985 as a mergers and acquisitions firm by Peter Peterson and Stephen Schwarzman, who had previously worked together at Lehman ...
in 1985. Blackstone started out as an M&A advisory firm before branching out into private equity investing, a formula that made both men billionaires. A few years later,
Bruce Wasserstein Bruce Jay Wasserstein (December 25, 1947 – October 14, 2009) was an American investment banker, businessman, and writer. He was prominent in the mergers and acquisitions industry, credited with working on 1,000 transactions with a total value ...
and Joseph Perella left
First Boston : ''For the company after its acquisition by Credit Suisse, see Credit Suisse First Boston (known as CSFB and CS First Boston)'' The First Boston Corporation was a New York–based bulge bracket investment bank, founded in 1932 and acquired by ...
and created Wasserstein Perella. In 2006 Perella co-founded Perella Weinberg Partners, with Peter Weinberg, then of Goldman Sachs."


1990s: Conglomerate model ascendent

The repeal of the 1933 Glass-Steagall Act that kept investment banks and commercial banks separate led to significant consolidation. The FT wrote that in the 1990s, "the 'financial supermarket' model was ascendant." Sandy Weill rolled up various commercial banks, investment banks, brokerages and insurance companies to form
Citigroup Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services company based in New York City. The company was formed in 1998 by the merger of Citicorp, t ...
.
J.P. Morgan JP may refer to: Arts and media * ''JP'' (album), 2001, by American singer Jesse Powell * ''Jp'' (magazine), an American Jeep magazine * '' Jönköpings-Posten'', a Swedish newspaper * Judas Priest, an English heavy metal band * ''Jurassic Pa ...
and Chase Manhattan agreed to combine and
Credit Suisse Credit Suisse Group AG (, ) was a global Investment banking, investment bank and financial services firm founded and based in Switzerland. According to UBS, eventually Credit Suisse was to be fully integrated into UBS. While the integration ...
swallowed
Donaldson, Lufkin & Jenrette Donaldson, Lufkin & Jenrette (DLJ) was a U.S. investment bank founded by William H. Donaldson, Richard Jenrette, and Dan Lufkin in 1959. Its businesses included securities underwriting; sales and trading; investment and merchant banking; financi ...
in 2000.


2000s: Resurgence and wave of new firms

Evercore Partners Evercore Inc., formerly known as Evercore Partners, is a global independent investment banking advisory firm founded in 1995 by Roger Altman, David Offensend, and Austin Beutner. The firm has advised on over $4.7 trillion of merger, acquisitio ...
was founded in 1996 by Roger Altman and has a broader investment banking business than most independent firms, including equity research and underwriting services. Greenhill was also founded in 1996. Greenhill listed its shares in 2004,
Lazard Lazard Inc. (formerly known as Lazard Ltd and Lazard Frères & Co.) is a financial advisory and asset management firm that engages in investment banking, asset management and other financial services, primarily with institutional clients. It i ...
in 2005,
Evercore Evercore Inc., formerly known as Evercore Partners, is a global independent investment banking advisory firm founded in 1995 by Roger Altman, David Offensend, and Austin Beutner. The firm has advised on over $4.7 trillion of merger, acquisitio ...
in 2006, and Moelis in 2014. Ex-
UBS UBS Group AG (stylized simply as UBS) is a multinational investment bank and financial services firm founded and based in Switzerland, with headquarters in both Zurich and Basel. It holds a strong foothold in all major financial centres as the ...
banker Blair Effron founded
Centerview Partners Centerview Partners is an American independent investment banking firm founded in 2006. Centerview operates primarily as an Independent advisory firm, investment banking advisory firm with approximately 80 partners and 500 professionals advising ...
in 2006 because of the difference between smaller and larger firms, where he worked most of his career. He told the FT in September 2015, “ Dillon Read where I started was about providing intellectual capital.
UBS UBS Group AG (stylized simply as UBS) is a multinational investment bank and financial services firm founded and based in Switzerland, with headquarters in both Zurich and Basel. It holds a strong foothold in all major financial centres as the ...
hich acquired Dillon Read in 1995was a provider of financial capital.” Following the
2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...
, there was a heightened sense of
conflict of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple wikt:interest#Noun, interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates t ...
around the bulge bracket wall street banks. Dealogic recorded that the market share of U.S. boutiques hit 18% in the first half of 2015, up from 8% in 2008, with independent firms participating in six of the top 10 M&A deals. In March 2012 the FT wrote, "a long-term and fundamental trend is coming back to the fore: the perennial fight between smaller boutique advisers and their bulge-bracket rivals has picked up pace." In 2013, 80% of the top 10 M&A deals included independent advisors. In March 2013
Fortune Fortune may refer to: General * Fortuna or Fortune, the Roman goddess of luck * Luck * Wealth * Fate * Fortune, a prediction made in fortune-telling * Fortune, in a fortune cookie Arts and entertainment Film and television * ''The Fortune'' (19 ...
br>wrote
of the purported competitive advantages independent advisory firms face. The WSJ noted in April 2014 that "investors and clients are drawn to nimbler firms with less-complicated business models and fewer regulatory barriers ... Sprawling financial malls such as
Goldman Sachs The Goldman Sachs Group, Inc. ( ) is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many internationa ...
and
J.P. Morgan JP may refer to: Arts and media * ''JP'' (album), 2001, by American singer Jesse Powell * ''Jp'' (magazine), an American Jeep magazine * '' Jönköpings-Posten'', a Swedish newspaper * Judas Priest, an English heavy metal band * ''Jurassic Pa ...
hawk a menu of products: deal advice, lending, derivatives and so on. Boutiques purport to sell only the smarts and experience of their bankers. As a result, they claim that their counsel is unsullied by other interests." However, many have diversified into other areas such as asset management.
PJT Partners PJT Partners, Inc. is a global advisory-focused investment bank, founded in October 2015 as part of The Blackstone Group's spin-off of its financial and strategic advisory services businesses. PJT operates businesses across strategic advisory, ...
was founded in the summer of 2014 and merged with Blackstone's corporate finance and private funds business, floating on the NYSE in late 2015. In March 2015 the
Financial Post The ''Financial Post'' is a financial news website, and business section of the ''National Post'', both publications of the Postmedia Network. It started as an English Canadian business newspaper, which published from 1907 to 1998. In 1998, the ...
wrote, "in a coup that grabbed headlines ...
Centerview Partners Centerview Partners is an American independent investment banking firm founded in 2006. Centerview operates primarily as an Independent advisory firm, investment banking advisory firm with approximately 80 partners and 500 professionals advising ...
and another U.S. independent advisory firm,
Lazard Lazard Inc. (formerly known as Lazard Ltd and Lazard Frères & Co.) is a financial advisory and asset management firm that engages in investment banking, asset management and other financial services, primarily with institutional clients. It i ...
, shut out the majors in the year’s biggest deal ntil that point the US$75 billion merger of
Kraft Foods Kraft Foods Group, Inc. was an American food manufacturing and processing conglomerate (company), conglomerate, split from Kraft Foods Inc. on October 1, 2012, and was headquartered in Chicago, Illinois. It became part of Kraft Heinz on July ...
and H.J. Heinz". Hugh McGee of
Barclays Barclays PLC (, occasionally ) is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services ...
(formerly
Lehman Brothers Lehman Brothers Inc. ( ) was an American global financial services firm founded in 1850. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, and Merril ...
), who earned a $13m bonus in 2013, told the FT in September 2015 that “between regulatory compliance and internal bureaucracy I found myself spending 80 per cent of my time on non-client activities, which is really not fun”.


Notable firms


Current firms

*
Centerview Partners Centerview Partners is an American independent investment banking firm founded in 2006. Centerview operates primarily as an Independent advisory firm, investment banking advisory firm with approximately 80 partners and 500 professionals advising ...
*
Evercore Evercore Inc., formerly known as Evercore Partners, is a global independent investment banking advisory firm founded in 1995 by Roger Altman, David Offensend, and Austin Beutner. The firm has advised on over $4.7 trillion of merger, acquisitio ...
* Greenhill *
Guggenheim Partners Guggenheim Partners, Inc is a global investment and advisory financial services firm that engages in investment banking, asset management, capital markets services, and insurance services. Guggenheim has c. 2,000 employees. The firm has offices ...
*
Houlihan Lokey Houlihan Lokey, Inc., is an American multinational independent investment bank and financial services company. Houlihan Lokey was founded in 1972 and is headquartered at Constellation Place in Century City, Los Angeles, California. The firm ad ...
*
Lazard Lazard Inc. (formerly known as Lazard Ltd and Lazard Frères & Co.) is a financial advisory and asset management firm that engages in investment banking, asset management and other financial services, primarily with institutional clients. It i ...
* Moelis & Company * Perella Weinberg Partners *
PJT Partners PJT Partners, Inc. is a global advisory-focused investment bank, founded in October 2015 as part of The Blackstone Group's spin-off of its financial and strategic advisory services businesses. PJT operates businesses across strategic advisory, ...
* Rosinger Group *
Rothschild Rothschild () is a name derived from the German ''zum rothen Schild'' (with the old spelling "th"), meaning "to the red shield", in reference to the houses where these family members lived or had lived. At the time, houses were designated by signs ...


Defunct firms

* Dillon Read *
Salomon Brothers Salomon Brothers, Inc., was an American multinational bulge bracket investment bank headquartered in New York City. It was one of the five List of investment banks, largest investment banking enterprises in the United States and a very profitabl ...
* S.G. Warburg * Wasserstein Perella


References

{{Reflist Investment banking