Boutique investment banks refer to small, specialized investment banks that focus on providing high-end M&A advisory and other financial services to clients. As an important part of Wall Street, boutique investment banks in New York have been growing rapidly in recent years. This article will introduce the features and career development of boutique investment banks in New York.
Boutique investment banks have smaller team sizes, higher bonuses and compensation, and better work-life balance compared to bulge bracket banks. However, they are more selective in recruiting and have higher requirements on technical skills. Boutique investment banks in New York also undertake mega M&A deals that bulge bracket banks participate.
By analyzing several representative boutique investment banks in New York like Evercore, Centerview Partners, PJT Partners, we can better understand the development path and future trends of this industry.
Boutique Investment Banks Focus on High-End Services with Smaller Team Sizes
Unlike large investment banks, boutique investment banks only provide some high-end financial services instead of full range of offerings. Most boutiques specialize in M&A advisory, restructuring advisory, valuation and advisory services. For example, Evercore’s main business is M&A advisory.
With specialized service focuses, boutique investment banks can build sector expertise and establish closer client relationships. Meanwhile, the smaller team size also allows bankers to get more deal exposures and take up leadership roles earlier in their careers.
For instance, Evercore only had around 400 employees when founded in 1996. But it has expanded to 1,900+ employees across 11 countries now. The relatively small size compared to bulge bracket banks like Goldman Sachs with around 40,000 employees has been an important feature of boutiques.
Higher Bonuses and Compensation at Boutique Investment Banks
Boutique investment banks are famous for paying higher bonuses and overall compensation to bankers compared to large banks.
According to recent data, 1st year analysts at Evercore can receive up to $110k annual bonuses, much higher than large banks like JPMorgan ($40k-45k) and Citi ($35k-45k). This is related to the big-ticket deals boutique banks advise on.
For example, Evercore advised Nuance on its $19.7 billion sale to Microsoft in 2021. The M&A team at Evercore New York office led this deal and obtained $63 million M&A advisory fees from Nuance. Such large fees directly contribute to the high bonus pool.
Boutiques Offer Better Work-Life Balance But High Recruiting Selectivity
Compared to junior bankers at large banks working over 100 hours per week, boutique investment banks provide better work-life balance for employees. Bankers have more freedom to pursue personal life and maintain good health conditions.
However, recruiting process at boutiques is extremely selective with very limited openings. Top boutiques mainly target students from elite universities and business schools. Extensive financial modeling and accounting knowledge is definitely a plus.
According to WSO surveys, Evercore has ranked as the 2nd most difficult bank to get offers from, only behind PJT Partners, another renowned boutique bank.
Fast Career Growth Prospect at Boutique Investment Banks
The flat organizational structure and high employee turnover at boutiques allow bankers to take up key roles and leadership positions early on. It’s not unusual for a star performer getting promoted to Vice President within 3 years and Director within 6 years.
Many senior bankers and partners at top boutiques and private equity funds came from bulge bracket banks. Their solid industry expertise and connections make boutiques ideal places for young bankers’ fast-track career growth.
As boutique investment banks gain more reputation and rankings, more bankers view joining them as appealing career moves rather than backup options when they fail to secure offers from Goldman Sachs or other big banks.
In conclusion, boutique investment banks in New York have smaller team sizes, higher bonuses, better work-life balance and faster career growth prospects. However, the recruiting process is highly competitive with very limited openings. By showcasing strong technical skills and expertise, young students and bankers still have great opportunities to excel at top boutiques on Wall Street.