Chicago is home to a vibrant community of middle market investment banks that provide advisory and capital raising services to mid-sized companies. As businesses in the Midwest look to grow through M&A or access growth capital, partnering with the right investment bank can be crucial. This article will explore the key factors for selecting among the top middle market investment banks in Chicago.
Look for deep sector expertise in Chicago’s key industries
Many of Chicago’s middle market investment banks have specialized industry expertise relevant to prominent local sectors like healthcare, manufacturing, food & agriculture, transportation & logistics among others. Domain knowledge in these verticals allows bankers to better understand client needs and identify high value strategic opportunities.
Prioritize cultural fit and work style
The dynamics between client and banker can impact the success of engagements. Beyond sector expertise, consider the culture and work style of potential bank partners. Look for shared values around integrity, work ethic, and communication. Also evaluate their deal process and ensure it matches your needs in terms of pace, involvement level, and access to senior bankers.
Validate industry connections and access to capital
The right Chicago investment bank should leverage existing relationships to connect clients to potential buyers, capital sources, and other deal participants. Review past deals and client references to gauge their Rolodex and ability to get deals done. For capital raises, validate their access to the full spectrum of institutional funding sources.
Assess bench strength and continuity of coverage
Deals often involve multiple bankers and run for months, so check that your bank has strong continuity of coverage. Meet the team and assess overall bench strength, not just the proposed lead banker. Also look for junior team members who can provide analytical support in a cost-effective manner.
Compare fee structures and incentives
Though not the primary factor, fees impact return on investment from your banker. Understand the proposed fee structure and how incentives are aligned with your desired outcomes. Be wary of banks tilting too much to front-end fees rather than back-end success fees.
Selecting the right investment bank requires focusing on sector expertise, cultural fit, connections, team strength, and fee incentives. Taking the time to thoroughly evaluate options will lead to finding the optimal partner to advise on Chicago middle market deals.