Skip to content
Thomson Reuters
Wealth Management & Private Banking

Global investment banks see uptick in share of M&A advisory fees as upstart firms disrupt established boutiques

Matthew Toole

05 Oct 2015

rtrbpli-kai-pfaffenbach
REUTERS/Kai Pfaffenbach

As worldwide deal making approaches all-time record levels, the top 10 bulge bracket firms have seen a considerable uptick in combined advisory fee wallet share, powered by a 96% increase in the number of deals over $10 billion, which account for record-breaking 36% of announced M&A value, worldwide. Matthew Toole, Head of Deals Intelligence, puts the numbers into context and introduces a free webcast for those who want to delve deeper into the figures.

Sign up now

What’s driving global M&A and Capital Markets activity this year? Sign up here for the What’s driving deal making? Q3 review webinar? – Matthew Toole, Head of Deals Intelligence and Jeffrey Goldfarb, US Editor for Reuters Breakingviews will share their insight and expertise.

M&A totaled US$3.2 trillion during the first nine months of 2015, a 32% increase from comparable 2014 levels and the strongest nine months for worldwide deal making since 2007. Forty-seven deals with a value greater than $10 billion were announced during the first nine months of 2015, their combined value more than double the level seen during the first nine months of 2014.

Record levels

With two consecutive quarters surpassing $1 trillion in deal value for the first time in 15 years, the landscape for advisory work has changed dramatically across full service investment banks, regional and mid-tier firms and boutique and independent investment banks.

global-investment-banks-screenshot1

The top 10 global investment banks account for 49% of all M&A advisory fees completed so far this year, the highest combined percentage since the first nine months of 2011, as deal financing becomes increasingly important to the success of the transformational multi-billion dollar mega deal that’s become such a large part of this M&A cycle.

Established boutiques

“Since the financial crisis, the prominence of boutique and independent advisory firms has grown as established firms lure away talent from established global firms or deal makers strike out and set up shop on their own.  As a result, these boutique firms have taken an increasing part of the M&A fee pool, now at 31% of completed deals so far in 2015,” says Matthew Toole.

However, a shakeup seems to be afoot within the ranks of boutiques and independents this year, as the well-established and publicly traded firms – Lazard, Rothschild, Evercore, Moelis, Houlihan Lokey and Greenhill – have taken in 37% of all fees paid to boutiques through the first nine months of the year, the lowest level since Thomson Reuters/Freeman Consulting began tracking and modeling advisory fees in 2000.

By contrast, new advisory firms born out of the financial crisis are picking up significant share within the nearly $5.5+ billion of advisory fees doled out to boutiques. Centerview Partners registered a gain of 4.0 wallet share points this year, tech specialist Qatalyst Partners grew by 2.3 percentage points, energy focused deal maker Tudor Pickering & Co picked up one percentage point this year, while European-based Zaoui & Co ticked up share of boutique fees by 0.8 points.

global-investment-banks-screenshot2

Source  Thomson Reuters Deals Intelligence

Mergers and acquisitions boom

As we progress through this latest boom of mergers and acquisitions, the inter-play between big brand name advisory firms and new players on the scene will be just one of the many corners of the market to watch as companies around the world assess the current state of deal making, seek counsel and potentially make a move.

The developments are significant and the subject of our quarterly webcast on October 6th.

Register now

Join us to delve deeper into the trends that are driving global M&A and Capital Markets activity this year. Matthew Toole, Head of Deals Intelligence, and Jeffrey Goldfarb, US Editor for Reuters Breakingviews will share their insight and expertise.

Sign up here

request-a-free-trial-today-cta-banner

Wealth management: Meeting high client expectations Eikon App Studio: New apps for February Eikon App Studio: What’s new for January? Tuning up your business for PRIIPs regulation What wealth managers need to know about AI Insights from our annual wealth conference Sustainable Development Goals: Unlocking value in ESG investing? The digital future of wealth management Asset management trends in Europe spark lively debate Paradise Papers: What new offshore leak reveals about UBO challenge