In the case of boutique investment banks in particular, they are more akin to the old British merchant banks and, rather than lending money like traditional banks, are primarily focused on providing a range of sophisticated advisory services including up to the minute market analysis, advice on mergers and acquisitions, underwriting your company’s share issues, arranging finance and floating your business on the stock market. An investment banking partner will always be a vital support for many of your business’s most important transactions.
Investment banks are generally categorised by size. As with any industry, size drives differences in the market segment they prefer to operate in and the range of services you can generally expect to receive. A comparison of so-called “bulge bracket” and “boutique” banks illustrates other important differences that should inform the choice you make as you look for a perfect bedfellow.
Bulge Bracket Banks
The nature of an investment bank’s services meant that historically, they tended to cater for larger corporations, institutions and even – during privatisations for example – the government. Very big customers like these demanded very big, often trans-Atlantic banks. This led to the creation of a handful of so-called “bulge bracket” investment banks. The term refers to the press releases of landmark deals, in which the bank handling the transaction takes star billing and splashes its name in a sufficiently grand font size to make sure its name bulges out! Such firms fiercely compete for headlines in the financial press to keep their hat in the ring for the next major transaction.
The modern business world is very different from even a few decades ago. Globalisation, consolidation and international competition now affect businesses of every size. It is no longer only the government or FTSE 100 companies which require the help and expertise of investment banks. Mid-size companies are in just as much need of bespoke advisory services and can now out-source expertise in these areas to their investment bank. In the same way that big customers demand big banks, mid-size companies expect no compromise on the quality of services but do expect their investment banks to reflect their values and have demonstrable expertise with companies of their size and in their particular market segment. Boutique investment banks fulfil this need.
Finding the Right Partner
If you value great service and fresh ideas, then a boutique investment bank may be right for you. A boutique bank will have the flexibility to meet the needs of your business, will focus on quality over quantity and will favour a partnership approach.
Panmure Gordon lives and breathes the mid market and understands that the needs of businesses in this sector can be very different from those of larger enterprises. We enjoy an unparalleled reputation for quality and a bespoke service that only a boutique bank can provide. Since 1876 we have helped businesses grow, acquire and invest.