{"id":3929,"date":"2019-05-08T09:02:05","date_gmt":"2019-05-08T01:02:05","guid":{"rendered":"https:\/\/www.levin.com.hk\/%e6%9c%aa%e5%88%86%e9%a1%9e\/pros-and-cons-of-working-at-a-boutique-investment-bank\/"},"modified":"2019-05-08T09:02:05","modified_gmt":"2019-05-08T01:02:05","slug":"pros-and-cons-of-working-at-a-boutique-investment-bank","status":"publish","type":"post","link":"https:\/\/www.levin.com.hk\/zh-hant\/blog-zh-hant\/pros-and-cons-of-working-at-a-boutique-investment-bank\/","title":{"rendered":"Pros and cons of working at a boutique investment bank"},"content":{"rendered":"

The recent spike in M&A activity means that\u00a0boutiques are hiring<\/a>, both at the senior and junior level. Senior investment bankers likely know the deal with boutiques: there\u2019s more risk; there\u2019s more potential for reward; and you\u2019ll need a hoard of close client relationships to be successful. For junior bankers, deciding between a bulge-bracket bank and a boutique can require more thought, particularly if you are coming straight from undergrad or post-grad studies.<\/span><\/p>\n

The biggest difference between the two isn\u2019t necessarily size. Evercore is one of the better-known boutiques and it employs more than 1,600 people, for example. In fact, some established firms like Evercore and Moelis & Co. are pushing back on the term boutique, preferring \u201cM&A independent bank,\u201d according to Andy Pringle, managing director of headhunter Circle Square. That\u2019s unlikely to stick, if we\u2019re being totally honest.<\/span><\/p>\n

What makes boutiques unique is the limited number of services they offer, the most important being major financing. As such, boutiques rely on rainmakers \u2013 advisors with strong relationships with clients who prefer to hire bankers over banks. Working closely with rainmakers is a major advantage, says Logan Naidu, CEO of banking recruiter Dartmouth Partners. You\u2019ll develop closer relationships, have more client contact and work in a more collegiate atmosphere.<\/span><\/p>\n

That said, the niche nature of the business can limit growth opportunities in different areas (like ECM and DCM) that are available at large banks, including global rotations, Naidu said. The training may also not be as good at many boutiques and the firm may be shut out of larger deals due to a lack of lending capabilities \u2013 the most obvious con. Many deals require full-service investment banks. It\u2019s that simple.<\/span><\/p>\n

Others feel the niche focus of boutiques can open future career opportunities that may not be available to junior bankers at larger firms. \u201cNiche sector teams line up very nicely for juniors to move into private equity and venture capital,\u201d said Pringle.<\/span><\/p>\n

He also noted that boutiques can shelter younger staffers from some of the more brutal day-to-day aspects of working at a traditional bulge-bracket bank. They tend to offer a better work-life balance; there\u2019s less of a \u201chire and fire\u201d culture; and, because boutiques often work with sell-side firms, juniors don\u2019t spend near as much time putting together large pitch books that may never even be read.<\/span><\/p>\n

The work at boutiques is \u201c70% or 80% execution and the origination is more intelligent than the \u2018volumes of data is king\u2019 model\u201d that bulge-brackets may employ, Pringle said. One of the\u00a0chief complaints of junior bankers who quit<\/a>\u00a0\u2013 outside of the hours \u2013 is putting in weeks of work on deals that are never even considered.<\/span><\/p>\n

Perhaps the biggest downside of boutiques, other than the issue surrounding financing, is the lack of brand awareness, though some firms are making strides here. \u201cThere is a feeling of working at a tier-1 bank that can\u2019t be replicated,\u201d said one current U.S.-based MD who asked to keep his firm anonymous. It\u2019s easier to become a rainmaker at a boutique by first developing relationships with big-name clients while working at a large bank \u2013 and then switching firms \u2013 rather than trying to move up the ladder at a boutique, he suggested.<\/span><\/p>\n

As an example, Evercore hired six senior managing directors from outside the company last quarter while promoting just seven and moving on from five, according to Buckingham Research. You\u2019ll likely never see such a ratio at a large investment bank that will do more promoting from within. Many boutiques are known for their \u201chired gun\u201d philosophy in filling out the top ranks of their hierarchy.<\/span><\/p>\n

Ironically, it may be easier to become a senior MD at a top boutique by\u00a0not<\/em>\u00a0starting your career there. It\u2019s hard to bring in new business when you have the same rolodex as your boss.<\/span><\/p>\n

Compensation is complicated<\/strong><\/span><\/p>\n

Pay can oftentimes be better at boutiques that have fewer restrictions over compensation, said James Mitchell, an analyst at Buckingham Research. Clawbacks are a rarity and many boutiques tend to pay bonuses in cash, he said. The numbers from\u00a0Wall Street Oasis<\/a>\u00a0tell a similar story, with the top 10 largest bulge-bracket banks paying their first-year analysts, on average, a slightly larger salary than their counterparts at boutiques, yet boutiques make up the difference, and more, with larger bonuses. (It\u2019s worth noting that the numbers only include the top handful of boutiques).<\/span><\/p>\n

At the top, compensation is a bit more murky. Several boutiques have switched from a more traditional commission-based structure to a shared bonus pool where MDs are judged on factors like talent development and the inclusion of other lines of the business, making their pay more subjective. How much that has changed things is up for debate. We were\u00a0told last year<\/a>\u00a0that one firm disappointed analysts by carving out a larger share of the bonus pool for MDs to make sure they were happy.<\/span><\/p>\n

Like anything in banking, pay depends on the firm, the role and performance.<\/span><\/p>\n

Source : eFinancial Careers<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

The recent spike in M&A activity means that\u00a0boutiques ar Continue Reading<\/a><\/p>\n","protected":false},"author":8,"featured_media":3927,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[80],"tags":[],"_links":{"self":[{"href":"https:\/\/www.levin.com.hk\/zh-hant\/wp-json\/wp\/v2\/posts\/3929"}],"collection":[{"href":"https:\/\/www.levin.com.hk\/zh-hant\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.levin.com.hk\/zh-hant\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.levin.com.hk\/zh-hant\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.levin.com.hk\/zh-hant\/wp-json\/wp\/v2\/comments?post=3929"}],"version-history":[{"count":0,"href":"https:\/\/www.levin.com.hk\/zh-hant\/wp-json\/wp\/v2\/posts\/3929\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.levin.com.hk\/zh-hant\/wp-json\/wp\/v2\/media\/3927"}],"wp:attachment":[{"href":"https:\/\/www.levin.com.hk\/zh-hant\/wp-json\/wp\/v2\/media?parent=3929"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.levin.com.hk\/zh-hant\/wp-json\/wp\/v2\/categories?post=3929"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.levin.com.hk\/zh-hant\/wp-json\/wp\/v2\/tags?post=3929"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}