Europe's boutique firms stealing M&A market share, dealmakers, data shows

Sun Aug 14, 2016 3:45am EDT
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By Anjuli Davies and Pamela Barbaglia

LONDON (Reuters) - Boutique advisory firms now receive nearly half of all mergers and acquisition fees in Europe, stealing market share and top dealmakers from global investment banks hamstrung by a renewed focus on cost-cutting and regulations on how much they can pay.

Founded largely by veterans fleeing bureaucracy and shrinking paychecks at the large banks, these low-profile small firms are proving popular among companies who value their niche expertise and independent advice as opposed to mega-banks who tend to cross-sell other services like financing.

Advisory boutiques have captured 44 percent or $1.7 billion of total completed M&A deals fees in Europe, Thomson Reuters data collected up to August 10 shows. Boutiques based in Europe captured 24.9 percent, or $964 million, and other boutiques took the other 19 percent, or $728 million.

That compares with 42.8 percent for the whole of 2015, 30.5 percent at the height of the last M&A boom in 2007 and 20.1 percent in 2000, when Thomson Reuters began recording the data.

The data excludes some of the massive deals of 2015 that have not yet been completed, including Anheuser-Busch InBev's (ABI.BR: Quote) $100 billion-plus merger with SABMiller SAB.L.

"We are not trying to sell multiple products. Our sole focus is on high-value-add advisory business, and as such we have no conflicts," Pieter-Jan Bouten, managing director at Greenhill, one of the early U.S.-based boutiques to set up in Europe, told Reuters.

Boutiques are defined as firms earning greater than 85 percent of their fees from M&A and equity capital markets activity (ECM), with M&A accounting for at least 70 percent of that wallet.

"With the number of boutique firms occupying M&A league tables at its highest since the 1980s, we can expect the attractiveness of independent advisories (for job seekers) only to increase," said Alex Howard-Keyes, Head of Wholesale Financial Services at Alderbrooke, the executive search firm.   Continued...

Photo illustration of beer flowing from a bottle of Stella Artois into a glass, part of the Anheuser-Busch InBev group, seen against a SABMiller logo, November 5, 2015.   REUTERS/Dado Ruvic/Illustration/File Photo