A boutique investment bank is an investment bank that specializes in at least one aspect of

investment banking Investment banking is an advisory-based financial service for institutional investors, corporations, governments, and similar clients. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by und ...

, generally

corporate finance Corporate finance is an area of finance that deals with the sources of funding, and the capital structure of businesses, the actions that managers take to increase the Value investing, value of the firm to the shareholders, and the tools and analy ...

, although some banks' strengths are

retail Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is the sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholes ...

in nature, such as Charles Schwab. Of those involved in corporate finance, capital raising,

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 restructuring and reorganizations are their primary activities. Boutiques usually provide advisory and consulting services, but lack capacity to provide funding. After the

Gramm–Leach–Bliley Act The Gramm–Leach–Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, () is an act of the 106th United States Congress (1999–2001). It repealed part of the Glass–Steagall Act of 1933, removing barriers in ...

, investment banks have either had a retail deposit base (

JPMorgan Chase JPMorgan Chase & Co. (stylized as JPMorganChase) is an American multinational financial services, finance corporation headquartered in New York City and incorporated in Delaware. It is List of largest banks in the United States, the largest ba ...

, Citi,

Bank of America The Bank of America Corporation (Bank of America) (often abbreviated BofA or BoA) is an American multinational investment banking, investment bank and financial services holding company headquartered at the Bank of America Corporate Center in ...

) or have had funding from overseas owners or from Wealth Management arms ( UBS,

Deutsche Bank Deutsche Bank AG (, ) is a Germany, German multinational Investment banking, investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York Stock Exchange. ...

Morgan Stanley Morgan Stanley is an American multinational investment bank and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in 42 countries and more than 80,000 employees, the firm's clients in ...

). Boutique banks on the other hand often turn to other banks to provide funding or deal directly with capital rich firms such as insurers to provide capital for deals. Boutique investment banks generally work on smaller deals involving middle-market companies, and usually assist on the sell or buy-side in mergers and acquisitions transactions. In addition, they often specialize in certain industries such as media, healthcare, industrials, technology or energy. Some banks may specialize in certain types of transactions, such as capital raising or

, or restructuring and reorganization. Typically, boutique investment banks may have a limited number of offices and may specialize in certain geographic regions, thus the moniker 'regional investment bank'. Traditionally, boutique investment banks are specialized in certain fields of corporate finance and thus not full-service. However, the term is often used for non- bulge bracket full-service investment banks, banks that are also known as middle-market investment banks.

History

During 2014, ''

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'' ''

The New York Times ''The New York Times'' (''NYT'') is an American daily newspaper based in New York City. ''The New York Times'' covers domestic, national, and international news, and publishes opinion pieces, investigative reports, and reviews. As one of ...

'', and ''

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'' all published favorable articles regarding the growing trend of corporations to hire boutique investment banks. Reasons cited included their absence of conflicts, independence, and skill of one or a relative few individuals. The discrediting of traditionally conflicted

Wall Street Wall Street is a street in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It runs eight city blocks between Broadway (Manhattan), Broadway in the west and South Street (Manhattan), South Str ...

investment banking firms, especially those listed as full-service or conglomerates on the list of investment banks, due to their role in the creation or exacerbation of 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 ...

, is cited as a primary reason for the ascendancy of these boutique firms. However, advances in technology which permit the outsourcing of all non-core aspects of the firm have also been cited as a cause of this

David David (; , "beloved one") was a king of ancient Israel and Judah and the third king of the United Monarchy, according to the Hebrew Bible and Old Testament. The Tel Dan stele, an Aramaic-inscribed stone erected by a king of Aram-Dam ...

versus

Goliath Goliath ( ) was a Philistines, Philistine giant in the Book of Samuel. Descriptions of Goliath's giant, immense stature vary among biblical sources, with texts describing him as either or tall. According to the text, Goliath issued a challen ...

phenomenon. Working at boutique investment banks generally requires working longer hours than at larger banks, even though the majority of boutiques are founded and led by former partners at large banks. As larger investment banks were hit hard by the

Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.

of the 2000s, many senior bankers left to join boutiques, some of which largely resemble the partnerships that ruled Wall Street in the 1970s and 1980s. Boutique investment banks took a greater share of the M&A and advising market at the same time. Large, prestigious boutique firms include Evercore, Lazard, Centerview Partners, PJT Partners, Rothschild & Co and Moelis & Company. While these may be full-service and international in scale, they are significantly smaller than and do not offer the breadth of products and services of bulge bracket investment banks.

Services

Boutique investment banks may be engaged in providing one or more of the following services: * Connecting clients, especially with regard to IPOs or further stock offerings. *

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 ...

advisory * Underwriting

debt Debt is an obligation that requires one party, the debtor, to pay money Loan, borrowed or otherwise withheld from another party, the creditor. Debt may be owed by a sovereign state or country, local government, company, or an individual. Co ...

and/or

equity securities Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporation in proportion t ...

* Capital raising (e.g.

private equity Private equity (PE) is stock in a private company that does not offer stock to the general public; instead it is offered to specialized investment funds and limited partnerships that take an active role in the management and structuring of the co ...

deals; not as common due to small firm size)

Notable boutique investment banks

The following is a partial list of notable boutique investment banks: * Allen & Company * Centerview Partners * Ducera Partners * Evercore * Financial Technology Partners * Greenhill & Co. *

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 * Lazard * Leerink Partners * LionTree * Moelis & Company * Perella Weinberg Partners * PJT Partners * Qatalyst Partners * The Raine Group * Robey Warshaw * Rothschild & Co * Seabury Capital * Zaoui & Co.

References

{{DEFAULTSORT:Boutique Investment Bank Investment banking

History

Services

Notable boutique investment banks

See also

References