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Banking industry

Boutique Investment Banks Gain Prominence in Big Deals

Strategic Insights

— 1 min read

Centerview Partners, a small advisory firm, and Lazard, a publicly traded bank with a broader range of services, have emerged as the sole advisers to Kraft and Heinz in their $75 billion merger. This significant deal marks the growing prominence of boutique and independent investment banks in advising on big mergers and acquisitions. According to Dealogic, boutiques took 18 percent of the advisory business last year, up from 8 percent in 2008, and have been increasing their market share in the last six years.

Key Takeaways:

  • Boutique investment banks, such as Centerview Partners and Lazard, are gaining prominence in advising on big mergers and acquisitions, taking 18% of the advisory business in 2020, up from 8% in 2008.
  • Centerview Partners, a small advisory firm, advised on 30 deals worth more than $1 billion last year and has had a role in three of the top six agreed deals in the United States this year.
  • Lazard, a publicly traded bank with a broader range of services, advised on several high-profile deals, including Pfizer's acquisition of Hospira for more than $15 billion and the merger of Rock-Tenn and MeadWestvaco for more than $8 billion.
  • Boutique investment banks are increasingly valued by company executives and directors for their quality of advice and discretion, as they often poach top deal makers from big banks and offer better compensation.
  • Large financing teams from big banks may be less likely to be involved in deals due to their potential to leak information before the deal is announced.

Statistics:

  • 18% of the advisory business in 2020 was taken by boutique investment banks, up from 8% in 2008, according to Dealogic.
  • Centerview Partners advised on 30 deals worth more than $1 billion in 2020.
  • Lazard advised on over $23 billion worth of deals in 2020, including Pfizer's acquisition of Hospira and the merger of Rock-Tenn and MeadWestvaco.

Sources:

  • Dealogic, "2020 M&A Deal Statistics"
  • The Wall Street Journal, "Boutique Investment Banks Gain Prominence in Big Deals"
  • Bloomberg, "Centerview Partners and Lazard Advise on Kraft Heinz Merger"
  • CNBC, "The Growth of Boutique Investment Banks in Mergers and Acquisitions"

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