A random blog

The Institutional Investor has a nice one on the growth of M&A boutiques and their race against the bulge bracket firms.

A few snippets:

Joseph Perella has a classical philosophy of what makes a great investment banker.

"It is one of the few remaining industries that follow the renaissance model," says the veteran merger adviser. "You don't pick up a book to learn how to do it. You learn on the job under an experienced hand, like going to the studio of Leonardo da Vinci or Michelangelo to chisel marble."

But this da Vinci code may be in peril, suggests the 64-year-old Perella, who has tutored generations of merger bankers during more than three decades on Wall Street. "The renaissance model requires that the mentors be around to teach the people coming in," he explains. "Whenever there is an exodus of senior people, that model is going to get tested."

Now is one of those times.

...the strong showing by boutiques [is not] a one-off event. As recently as 1999, independent firms were involved in fewer than 10 percent of global public-company mergers... By last year [2005] their market share exceeded 25 percent.

...Many observers, at both small and large firms, now see the independents not as a fly-by-night phenomenon but as a permanent and significant fixture of the M&A landscape -- for a host of reasons.

...Today's M&A boom ensures that there's more than enough business to go around: Rainmakers at the top four M&A firms -- Goldman, Morgan Stanley, Citigroup and J.P. Morgan -- generated an astronomical $5.9 billion in advisory fees last year, up from $4.8 billion in 2004, according to their financial statements. Global M&A volume reached $2.2 trillion last year, twice 2002's level and the highest since the bubble-inflated record of $3.4 trillion in 2000.