Boutique Investment Banks Harvard Case Solution & Analysis

Boutique Investment Banks are non-full service investment banks that specialize in some aspects of investment banks such as corporate finance. They usually provide services to raise capital, mergers and acquisitions and restructuring and reorganization. These banks usually work on smaller deals and assist on the sell-side in mergers and acquisition transactions. The reason behind their success in recent years has been their expertise in their fields. Moreover, they provide the highest level of personalized service to their clients.

The growth of sectors such as software, semiconductors, media, Internet, customer service, business services, Greentech and emerging technologies and various aspects of health care and sciences. Besides the services of investment banking, they have diversified into international brokerage and wealth management. They provide services to rich individuals, partnerships and non-profit organizations. They assist them to take investment decisions and make money, thus making them valuable.

I have decided to open a boutique investment bank because it has many advantages as far as I am concerned. While Bulge Bracket banks such as Goldman Sachs may advise on multi-billion dollars, a boutiquewill only do deals worth a billion. As I am now in the market, my business would deal with transactions of small amounts. It would allow the boutique to satisfy customer issues on a personal basis and exploit the niche market.

Moreover, opening a boutique is beneficial for employees who work there. As the employee base is very small, employees get a chance to take more responsibility and just remain a number-Cruncher at a boutique. The environment and working conditions at a boutique will keep them motivated and satisfied. Moreover, a boutique will allow them to get a good experience and learn more about deals  which they would not get to do at the Bulge Bracket.

Since the recession in 2008, the companies around the world look to cut costs. Therefore, the trend is to employ boutique banks, which has lower fees as compared to large bulge bracket banks. The personalized service provided to these companies as opposed to large banks will improve the reputation of my boutique.

As my boutique will operate within a specific domain and in a niche, my boutique gain knowledge of that particular industry.

Due to the slow down of economic activity around the world, the number of boutique investment bank has increased during the year. Experienced individuals, who were not secure about the job prospects and growth in their banks, have opened their boutique investment banks. According to the Wall Street Journal, the share of the US Merger and Acquisition Market has fallen to 79% in 2011 from 89% in 2001.  In Europe, the drop was steeper that is 64%, down from 76%(Nigudkar, n.d.).

This trend is expected to continue in the future. Therefore, more boutique banks would openaround the world.

Although big deal has usually taken place in 2014, boutique investment banks have also raised their market share. For instance, Lazard advised AT&T Inc on its $49 billion takeover of Direct TV, Paul J worked alongside JP Morgan Chase and Barclays in helping Comcast make its  $45 billion bid for Time Warner Cable(MERCED, n.d.).

Boutique Investment Banks Case Solution

Moreover, Centerview Partners were in the 11th position in the Thomson Reuter ranking of the top deal advisers for the year. Overall, boutique investment banks make up eight of the 25 top merger banks. Transactions of these types have been taking place in 2014 with $3.2 trillion worth of transactions so far. In November,  Actavis announced publicly about its $66 billion  takeover of the Botox maker Allergan, and Halliburton is determined to purchase the Oil field service provider Baker Hughes for $34.6 billion(MERCED, n.d.).

Boutique investment banks have achieved tremendous success over the decade. Some of these organizations have grown rapidly, such as mailing& Company now has more than 500 employees and become a public limited company(MERCED, n.d.).

Boutique investments banks have specialized in different industries in USA. Qatalyst Partners has its eye on technology deals and the former UBS banker Aryeh Boukoff, specializes in media and telecommunication transactions. Both firms are successful in achieving profitable assignments such as Qatalyst advised the enterprise software maker Concur Technologies on its $8.3 billion sale to Sap. Lion Tree and Goldman Sachs are advising Charter Communications on   a deal to pick up cable customers from Comcast as part of its Time Warner Cable deal(MERCED, n.d.)..................

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