Boutique investment bank
What is a boutique investment bank?
It's a smaller investment bank that often specialises in a certain industry, a particular geographic location or in certain types of transactions. Boutique investment firms tend to work on smaller or niche deals, often for middle-market companies, which are under the radar of larger firms.
Where have you heard about boutique investment banks?
You may have seen stories in the financial press about the rising number of boutique investment banks. They've been taking a larger share of merger and acquisition fees in the US since the 2008 financial crisis, perhaps, in part, due to the increased regulations placed on larger firms.
What you need to know about boutique investment banks.
Boutique investment banks lack the resources of larger firms so instead they position themselves as experts in a particular niche or gap in the market, offering a more tailored and bespoke service.Examples of such banks are: The Blackstone Group, Brown Brothers Harriman, and Piper Jaffray
The founders are often former members of larger firms that want to strike out on their own. Because of the smaller size of the banks, the investment managers have a vested interest in making sure that the firms succeed. Generally, they're able to give more attention to clients and often remain involved in the entire process rather than handing it over to a wider team.
On the other hand, they may not have the network or clout of larger firms. They also usually have a limited number of services on offer; in contrast to the larger firms that can act as one-stop shops for a client's entire financial needs.
Find out more about boutique investment banks.
On the other side of the coin to boutique investment banks are the large multinational investment firms. Find out more about the so-called bulge-bracket banks.