How to Make a Career in Top Boutique Investment Banks

1x1.trans How to Make a Career in Top Boutique Investment Banks

Since investment banking is such a hot topic of discussion among finance aspirants, I thought of taking this discussion to a detailed level.

It is important for us to know what various types of investment banks are available out there.

In this article, I am going to tell you about top and best boutique investment banks around the world. But, before we get into specific details, let us first understand what exactly these boutique investment banks are.

 

What Is a Boutique Investment Bank?

Investopedia defines boutique investment banks as – “A small financial firm that provides specialized services for a particular segment of the market. Boutique firms are most common in the investment management or investment banking industries. These firms may specialize by industry, client asset size, banking transaction type or by other factors to address a market not well addressed by larger firms.”

In simple words, boutique investment banks are small firms that offer services related to a specific industry or niche area. They are much smaller in size and revenues when compared to the mainstream large investment banking firms. They offer customized services to its clients and can cater to very specific needs of the customers.

Boutique investment banks typically work on the sell side of the domain rather than the buy side. Most of these firms are start-up companies usually owned by ex-investment bankers with some experience in large investment banks. These banks are a great place to start your career and getting acquainted with investment banking.

Below is the list of top boutique investment banks in :

 

NYC:

-          Akin Bay Company

-          AGM Partners LLC

-          Barman Capital LLC

-          Brocair Partners LLC

-          Chardan Capital Markets, LLC

-          Charles Morgan Securities, Inc.

-          Dynamica, Inc.

-          DZ Financial Markets LLC

-          Fieldstone Private Capital Group, Inc.

-          FinanceNYC, LLC

-          GLC Advisors & Co., LLC

-          Hyde Park Advisors, LLC

-          Junewicz & Co. Inc.

-          Lighthouse Financial Group

-          Lightstone Securities, LLC

-          Merchant & Schumacher Associates, LLC

-          Mercury Capital Advisors, LLC

-          Torreya Partners LLC

-          Touchstone Group, LLC

-          Walsh Manning Securities Inc.

-          Winchester Realty, LLC

-          Wynston Hill Capital LLC

-          XT Capital Partners, LLC

San Francisco:

-          Jefferies

-          San Trust Robinson Humphrey

-          Headwaters MB

-          Viant Capital

-          Pharus Advisors

-          Stifel Nicolaus Weisel

Chicago:

-          AG Becker & Co.

-          Arnstein & Company, LLC

-          Blackmore Partners Ltd.

-          Blackwater Capital Group, Inc.

-          Chicago Investment Group, L.L.C.

-          China-America Capital Company, LLC

-          Dresner Partners

-          DSI Global M&A

-          Fort Dearborn Advisors, LLC

-          Gardner Rich & Co.

-          GTR Partners

-          Hamptons International

-          Healthstrat Capital Advisors, LLC

-          Houlihan Capital, LLC

-          Iliad Avenues, LLC

-          Performance Trust Capital Partners, LLC

-          Plaisance Advisors LLC

-          Resource Financial Corporation

-          River Branch Capital LLC

-          Stout Risius Ross, Inc.

-          Sustainable Capital, LLC

-          The Alliance for Corporate Wealth LLC

-          The Biotech Capital Group

 

Boston:

-          3LP Advisors, LLC

-          Adventum Group, Inc.

-          Aeris Partners

-          America’s Growth Capital LLC

-          CFBDS Inc.

-          Chestnut Securities, Inc.

-          Commonwealth Capital Advisors, LLC

-          Consensus Advisors LLC

-          Consilium Partners LLC

-          Copley Browne, Inc.

-          Corby Capital Markets, Inc.

-          Covington Associates LLC

-          EnCapital

-          Envoy Advisors

-          G2 Capital Advisors LLC

-          Game Plan LLC

-          Gordon Associates, Inc.

-          Gryphon Management Company, Inc.

-          Northstar Global Partners, LLC

-          O’Conor, Wright Wyman, Inc.

-          Prevail Capital, LLC

-          Progress Partners, LLC

-          Provident Corporate Finance, LLC

-          Thornton Group LLC

-          Trudeau & Trudeau Associates, Inc.

-          Versailles Group, Ltd.

Houston:

-          Corporate Finance Associates

-          Howard Weil

-          Mike Adams Enterprices

-          Mills & Stowell

-          Tudor, Pickering, Holt & Company, LLC

Washington:

-          Jefferies Quarterdeck

-          Friedman, Billings, Ramsey & Company

-          FBR Capita Markets

-          McLean Group

-          Newman & Associates

-          NorthMarq

-          The PFM Group

-          PRC Grpup

-          Monticello Capital

London:

-              Ambrian Capital

-              Arma Partners

-              The Blackstone Group

-              Boenning & Scattergood

-              Brewin Dolphin

-              Brown Brothers Hariman

-              Climate Change Capital

-              DC Advisory Partners

-              Hawkpoint

-              Evercore Partners

-              Evolution Securities

-              Execution Nobel

-              Glaecher Shacklock

-              GCA Saavian

-              Harris Williams & Company

-              Houlihan Lokey

-              Liberium Capital

-              Moelis

-              Panmure Gordon

-              Perella Weinberg Partners

-              Piper Jaffray

-              Seymour Pierce

-              Thomas Weisel Partners

-              William Blair & Company

-              McQueen

Boutique Investment Banks Internship

As I have always stated in all my articles related to finding jobs and building a career, getting into a firm as an intern is the best way to do it. Finding an internship in a boutique investment bank and in a bulge bracket investment bank are two different ball games all together. Following is the list of most commonly observed differences:

  1. Deal size – Usually a large investment bank will strike a deal of millions or even billions of dollars at stake. While a boutique bank will hardly ever touch a few million dollars.
  2. Number of employees – When a bulge bracket investment bank will have offices around the world at multiple locations, a boutique investment bank would often work out of a few locations with a very small staff.
  3. Responsibilities – As an intern, you will have a very few task and responsibilities in a large investment bank. While in a boutique investment bank you could have a lot of responsibilities. There is a flip side to it as well. Sometimes you might also end up doing really basic work in boutique banks, with minimal learning. But in such cases you can always demonstrate your potential in the initial days and demand more complex work.

 

You should adopt the following strategy to apply at a boutique investment bank:

 

  1. Create a focused resume – As against a bulge investment bank where the clients are from across industries, boutique investment banks operate in a niche segment. You can highlight your interest or expertise in that niche area to enhance your chances of getting a shot at the interview.
  2. Personal application – Large investment banks would usually accept only online applications, but a boutique investment bank might not even have a section of internship careers on their website. It does not mean they would not have an opportunity of internship to offer. In this case a better strategy is to drop by at the office location and submit your resume. Trust me more often than not it works wonders.
  3. Extensive networking – Large investment banks have umpteen number of employees available on LinkedIn and other social media websites. But for a boutique investment bank the number of people available there will be far less. In order to network with such people you have to work a lot harder. Again personal visits and telephonic conversations have proved to be very fruitful in my experience.

Boutique Investment Banks Salary

The salaries offered at large bulge investment banks are obviously more than small boutique investment banks.

At times the difference can be 50 per cent less. But in terms of satisfaction levels, people working in boutique investment banks are better off when compared to the bid guns.

The working hours usually do not go beyond 60 to 65 hours in a week, and there is hardly anyone who works over the weekends (unless there is a deadline for submission or completion of task).

Following is a comparison of salaries offered at various levels in bulge investment banks as against boutique investment banks:

 

1x1.trans How to Make a Career in Top Boutique Investment Banks

Why Prefer Boutique Investment Banks for Career?

Well, this is a million dollar question. “Why should I choose a smaller firm to begin my career if I can work at a large firm with better compensation?”

There is no right or wrong answer for this particular question. It all depends on the perspective you are looking at and what are your expectations from life and your career. But in my opinion following are a few short term and long term advantages of choosing a boutique investment bank over a bulge investment bank:

Short term benefits

 

  1. Ease of getting a job – Since the global slowdown, getting jobs has become much more difficult and demanding than ever before. Large companies are fighting for survival and the operating margins are narrowing. Not many big companies are willingly taking up new recruitments so as to curb costs. Whereas smaller firms are not that much affected by the slowdown. It is partly because their overhead costs are still in control and they can afford to add more staff at reasonable salaries.
  2. Location preference – Most of the boutique investment banks have 1 or 2 offices. If you have a location preference you can apply to one such firm where your chances of moving around are very less. People who have recently started a family, or people with health obligations usually have a location preference. For such people boutique investment banks are an ideal place.
  3. Steep learning – Since the size of the company is typically small, there more chances of you getting more responsibilities at your position. In the beginning of your career you will be exposed to situations that are extreme and result in steep learning for you as an investment banker. You would not feel like a cog in the wheel in a small firm which you otherwise would in a bigger firm.
  4. Better to be a bigger fish in a small pond than a small fish in bigger pond – As this famous saying goes, whatever little you contribute to the cause of the company it will be recognized and appreciated. You will get more visibility in the company and the chances of you getting promoted and getting better work are a lot higher when compared to large investment banks.

 

Long term benefits

 

  1. Expertise – Since you will be operating within a specific domain and a niche, you will gain domain knowledge and expertise. At a large firm you will be working on multiple industries and verticals, whereas in a boutique firm you will be engaged in one particular industry. Your learning of that industry can mould your career and take you places in the long run. In a large firm you are unlikely to work on an industry for more than 3 to 4 project. But in a boutique firm, within a span of 5 years you would have worked on more than 10 projects (assuming one project lasts for about 6 months or so).
  2. Work culture – In a smaller firm, the work culture is more flexible and gives you an opportunity to adapt yourself to different situations. If at a later stage you decide to make a shift and join a bigger firm, it would be easier for you to adapt to its work environment when compared to a transition which is the other way round.
  3. Learning from the masters – You are likely to report to and work directly under the industry experts with a lot of experience. You can learn a great deal working with these people. In a large firm the opportunities of interacting and working with the higher management are minimal.
  4. Job security – There is a lot more job security in a smaller firm when compared to a large firm. There were more than 10,000 job cuts in large investment banks in the last 10 years, whereas this number is insignificant in the case of boutique investment banks.

 

Boutique Investment Banks Trends

Due to the global slowdown and economic crisis of the recent times, the influx of boutique investment banks has multiplied in the last few years.

Big shots from the large firms (who are not too secure about their jobs and growth) have branched out by opening their own firms. By doing this they have been able to snatch a few big client from the large investment banks.

According to the Wall Street Journal, the share of the U.S. M&A market held by those firms has fallen to 79% in 2011, from around 89% in 2001. The drop was even steeper in Europe: 64%, down from 76%.

This trend is expected to continue in the future as well which will result in setting up of more boutique investment banks in the industry.

I hope this article gave you enough clarity on the top and best boutique investment banks, and the advantages of working in these smaller firms. In case you have any questions or suggestions, please feel free to write back

 

How to Make a Career in Middle Market Investment Banks

 

1x1.trans How to Make a Career in Middle Market Investment Banks

 

Middle Market Investment Banks – In the Middle of Action?

 

” Facebook buys WhatsApp “

This is the toast of the season globally. But do you know who advised Facebook?

The logical answers would be Goldman Sachs, Morgan Stanley, UBS, and DeutscheBank etc.

Surprisingly, it’s a firm called Allen & Company.

By the way it isn’t a fluke, Allen & Company have also worked on Initial Public offering of Twitter Inc and have advised Time Warner when it was acquired by Comcast.

Another case in point is Lehman Brothers, which till its fall from grace in 2008 was considered the best of bulge bracket. However for much of its history it was a large middle market investment bank.

Also, if we go by a recent survey conducted by CNBC-YPO Chief Executive network, more clients are increasingly comfortable with smaller names as long as they deliver the maximum value for the money.

What Makes a Middle Market Investment Bank?

In the investment banking world, there are primarily three broad categories – bulge bracket, middle market investment banks, and boutique banks.

The classification at best is considerably fluid and a lot of banks do not exactly wish themselves to be called middle market investment banks or boutique.

Typically a middle market investment bank displays the following characteristics

Deals

The deal size of a mid market investment bank ranges between USD 50 million and USD 500 million.

Geography

Middle-market banks normally have strong national presence but very little international exposure as against bulge bracket banks which have offices in almost all major international financial centers.

Services provided

Middle-market banks provide the full range of services expected of an investment bank namely M&A advisory, fund raising from equity and debt capital markets, Restructuring, and other variations on those.

Some middle-market banks focus on a particular industry; for example, KBW focuses on Financial Institutions (FIG), Cowen is known for healthcare investment banking, and HoulihanLokey has a top Restructuring practice.

 

The Middle Market Landscape

Broadly the middle market banks can be classified as follows:

1. National full-service middle-market firms

Firms such as Robert.W. Baird, William Blair and Piper Jaffrayhave historically been broking firms which over time have expanded their services to combining wealth management, private equity and investment banking services thus creating scale to go national.

2. National advisory-only firms

Primarily these are operations within the Big Four accounting firm like PwC, E&Y, KPMG and Deloitte which do M&A advisory as part of audit and accounting practice.

3. Single-industry specialists

Some firms like Allen & Company have narrowed their exclusive focus to a single industry. These firms tend to be based out of a single location which is relevant to their industry group.

Top 50 investment banks to work for ( Middle-market investment banks list):

 

1x1.trans How to Make a Career in Middle Market Investment Banks

Source: Vault

The Working Environment, Salaries, and Bonuses

There isn’t much of a difference as far as working environment is concerned.

Bulge bracket or middle market or boutique, at all places Investment banking is the same profession demanding manic zeal and lot of grunt work for getting each deal.

 

1x1.trans How to Make a Career in Middle Market Investment Banks

Source: Indeed.com, Salary survey.

While bulge brackets clearly give you a better shot at working on bigger deals, however it doesn’t mean that you would learn more there. In fact, chances are that you learn the most when you’re given the most responsibility and when you’re exposed to more unusual scenarios which are provided by middle market investment banks.

Similarly, the hours are not that much different and if you pick a smaller bank because you think you’ll work less, you may be surprised.

These are fairly standard across the investment banking world. Base salaries aren’t that much different. However, when it comes to bonuses, things change. If you are in a bulge bracket or larger middle market banks, then your bonuses are much better compared to boutique investment banks. 

So Is it a Good Thing to Intern in a Middle Market Investment Bank?

Why it is feasible to intern in a mid-market bank. The following pointers could help:

  • After the 2008 meltdown, almost all “bulge bracket” banks with the exception of Goldman Sachs and Morgan Stanley either collapsed or were bought in by normal banks.
  • Additionally, if you look at the developed world, then majority of the deal making is happening in the middle market i.e. businesses which are typically family run and would rather seek expertise at hand than going thousands of miles away to the global financial centers.
  • With a lot of the erstwhile bulge bracket staff either creating their own mid-market banks or joining the existing ones, the level of sophistication in terms of transactions is significantly on the upside.
  • The tightening credit market is ensuring that large financing deals are being replaced by smaller financing deals, thus significantly enhancing the scope of growth of mid-market deals.
  • Recent norms introduced by US government are making it complex for family run businesses to execute M&A or financing transactions on their own. Thus the need for investment banking expertise is only going to increase.
  • Finally, a lot of the erstwhile investment banks started off as one man shows with JP Morgan being prime example. The erstwhile Lehman Brothers started off as a “dry goods store” far removed from investments in any way. Thus you may never know which of the current middle market banks like Moelis& Co, Allen& Co or Evercore Partners could be the next “bulge bracket” bank.

Now that we have made a strong case for mid-market banks, let us look at some criterion for choosing an internship.

The criteria can be broadly classified into:

  • Location: Yes, location should be a very important criterion. You must give sufficient weightage to the fact that if the internship converts to a full time offer, then you would have to stay there, network and see opportunities for career growth. Ideally you should try and secure an internship in one of the major financial centers.
  • Your co-workers: Chances are that the people from middle market investment banks would be more engaging with you as an intern. It could boil down to pure lack of manpower and also that you would be exposed to much more in terms of the kind of work than you would hope to get in a bulge bracket. Thus depending on your coworkers you could have a worthwhile internship which would be your biggest help in terms of getting the final offer or you could write something on the lines of “Monkey Business” which deals with the life of an analyst
  • Which industry you would like to specialize in: This should be a heavyweight, if you see yourself as a banker in the Tech space then pack your bags and go to Menlo Park in San Francisco, which is closest to Silicon Valley. If Oil and Gas is your fuel to success then Houston would be place to go. Thus which sector you would want to make a career should be a very important factor
  • Brand Name/Prestige: If all the above are equal then Brand Name/Prestige would be important. You may find it harder to land interviews if you did M&A in a bank which had done only 10 million USD M&A in 10 yrs. Also, recognition is important because most of your clients would not be from the financial services world, but outside of it. So your chances of bagging deals in future does depend on whether the bank is known or not.

 

Round Is the Shape That the Banker Likes

When we are talking “round” it has more to do with your sphere of activities than your physical shape.

The following strategies could help:

  • Mid-market banks operate a very lean staff, thus even if you are a master modeler, that alone may not help you with the internship. However if you can demonstrate competence in accounting and the legal aspects along with modeling, then you are hitting bull’s eye.
  • If your resume speaks of your activities in the local community, then you have a better shot at getting the call. After all, the investment banker grows on the basis of his ability to forge relations with the community around him/her.
  • Find the right person who is in charge of recruiting. The best option is through website or via calling. If nothing works, then sending the resume to the CEO isn’t a bad thing.

 

The phone call

 

  • How you answer the first phone call from the bank is also important. Normally the banks want to attach a voice to the resume and hence they would like to interview you over the phone. The following tips could come in handy:
    • Be as ardent on those phone calls as you would be if you receive a call from Goldman Sachs.
    • Be mature in your tone, after all Investment banking is a business between mature people. The more you giggle or gush, the less are your chances of getting through.
    • Be precise in answering the question. This would convey that you understand the value of time.
    • Do try and convince the interviewer that you would be sincere and professional in your activities, even if you are using the internship as a stepping stone to a Bulge bracket job.

 

The Face to face interview

If you do get the invitation to come to office, then congratulate yourself but don’t celebrate yet, chances are that you would be going through multiple rounds of interviews, something similar to what Goldman Sachs would have done…

  • The interviewers would range from the analyst who would be your mentor, to people all the way up to CEO or MD level.
  • Do brush up your concepts, and on the industry knowledge for the group you have been asked to come for the interview.
  • Be logical in your approach and you should be able to connect the dots which seem unrelated, for example recession in India could impact the mobile phone markets as India is one of the largest consumer of foreign made handsets. Less handsets could result in product delays, cuts in R&D expenditure, job loses etc.
  • The newspaper is your best friend during these times. It helps you to not only get relevant information, but also provides you with a much more rounded view of the world around you. So make it a part of your day that you would go through The Wall Street Journal, Financial Times, Yahoo Finance, The Deal, etc.
  • Read up the regional newspaper and industry publications for the latest happenings in the industry of your choice
  • Do carry all your certificates and score sheets in duplicate at least. You never know what documents they may ask from you. It also shows that you are organized and do have it in you to thrive in an unpredictable environment.
  • At the interview be prepared for the following in addition to the technical or subject matter questions:
    • Questions on GPA and choice of subjects in your score sheet. Be prepared to answer your minor in Chinese politics along with your finance or economics major
    • Explaining your choices for extracurricular activities like the clubs you are part of in college
    • Gaps in resume, if any
    • How do you see yourself growing through your job
    • Commitment to the industry vertical you have chosen
    • How much do you know about the firm
    • Critically evaluate any deal that the firm has done or a recent headline making deal in the industry group

 

Key Takeaway

To sum it all, it would be prudent to say that when seeking a career in middle market investment bank, be prepared as thoroughly as you would for any top level bank.

A sincere effort during internship with Robert W Baird or a Lazard could prove much more rewarding than with Goldman Sachs.

Always remember, no “bulge bracket” was born with the “bulge”. They began small, and acquired their scale over time, and it is best to hop in early so that you are on top when the next Facebook-Whatsapp deal comes to your alley.

 

 

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