Investment banks assist organizations with large, complex financial situations, often serving as underwriters and/or brokers in the process. Essentially, they make it possible for corporations, institutions, government entities and high-net-worth individuals to finance the types of high-profile transactions that we see in the news every day, such as mergers and acquisitions (M&A) and initial public offerings (IPOs).
While investment banks share in common these primary functions, their areas of expertise, offerings and sheer size can all differ. Within a given firm, there may also be many different groups dedicated to certain products or markets. Nevertheless, investment banks generally identify in one of our categories:
Bulge bracket banks are massive and multinational. Think Barclays Capital, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, UBS and the like. These firms provide full-service underwriting, M&A, sales and trading, asset management, advisory and other related services to Fortune 500 corporations. Most of their deals are in the billions.
Elite boutique banks are also very large in terms of their presence, handling multi-billion-dollar transactions across many regions or even countries. However, they generally have fewer employees than do the bulge bracket banks and will sometimes choose to focus on a particular sector and/or service (not to say they can’t or won’t offer a full range of services). Evercore, Greenhill & Co., Lazard, Moelis & Co., and PJT are examples of well-known elite boutique banks.
The smallest of investment banks, regional boutiques operate—as the label would imply—in a concentrated region. They are rarely full-service firms, and many work out of a single office. Don’t let their size fool you, though; regional boutiques still assist in deals of $50 million to $100 million, and offer rewarding opportunities to help shape cities and communities. They typically serve smaller firms, but may also be called upon by large corporations with headquarters in their geographic area. An investment bank in Illinois specializing in M&A, or one in Michigan focused on securities, are just two of the many examples of regional boutique banks you will find across the U.S.
Middle market banks are smaller than bulge bracket banks, but larger than regional boutiques. Some middle market banks are full-service, while others specialize. Most are involved in deals ranging from $50 million to $500 million. Banks such as Cowen Group, Houlihan Lokey, Lincoln International, KPMG Corporate Finance, and William Blair & Co. all fall within this category—although the line between regional and middle market can at times be indistinct as middle market banks will handle regional deals.
Becoming an Investment Banker
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