Status: Burning mid-night oil....daily
Joined: 07 Nov 2008
Schools: Yale SOM 2011 Alum, Kellogg, Booth, Tuck
WE 1: IB - Restructuring & Distressed M&A
, given: 548
Smaller IB Gaining Ground vs Traditional Big Banks [#permalink]
13 Feb 2009, 11:19
According to latest Fortune article called "Mini-Masters of the New Universe" (article not available online, yet), as the battle lines are drawn - smaller i-banks see their moment.
With Wall Street's biggest names in turmoil, the next tier of investment banks are licking their chops. Already those smaller firms have gained ground: Since 2000 about 20% of US M&A have been handled by independent i-banks, but last year that figure rose to 40%, according to Devin Ryan, equity analyst at Sandler O'Neill.
To be sure, M&A will be slow for the foreseeable future, but when the deals return they won't be the kinds of leverage fueled transactions that propelled the big banks - they're more likely to be plain old strategic M&A, which these smaller firms specialize in. Some, like New York - based Jefferies, offer the same range of capital-raising services as Goldman, Morgan et al., just on a smaller scale and without a proprietary trading desk that binged on toxic securities. Others, like Moelis & Co are M&A specialists looking to grow.
* Evercore Partners - $340 mil revenue in 2008. M&A specialist founded by ex-Blackstone bigwig and onetime Treasury official Roger Altman. Best known deals include - EDS sale to HP in 2008. Advised Wyeth on its $68 billion sale to Pfizer in 2009.
* Moelis - In 2007, superstar UBS banking head Ken Moelis picked up and left to start his own firm. Best known deals include - InBev's $61 billion acquisition of Anheuser-Busch, 2008's biggest deal.
* Lazard - $2.1 billion revenue in 2008. Elite advisor to mega LBO shops since the 70's. Run by Bruce Wasserstein. Best known deals include - Lehman's sale of Neuberger Berman. Currently advising Rohm & Haas sale to Dow.
* Thomas Weisel Partners - $300 million revenue in 2008. Former Montgomery Securities chief built the SF firm focused on starting IPOs. Best known deals include - Akami, Tivo, and Pets.com Poised to jump on any Web 2.0 startup IPOs
* Jefferies - $2.7 billion revenue in 2008. Onetime trading house is now a full service ibank that specializes in midsized companies. Best known deals include - Primary banker to natural gas giant Chesapeake. Also tops in many niches like shipping.