M&A Boutiques Benefit From Big Bank Woes

Indicative of their growth, the boutiques have been hiring at an impressive rate. Greenhill, for example, has added 26 managing directors in its advisory unit in the last 18 months, a 93% jump in head count. Its revenue per employee has fallen to around $900,000 from a high of $1.93 million in 2007, but it still remains higher than all its rivals except for Goldman.

Another trend favoring the boutiques is that they all have expertise in restructuring, a trade very much in demand at the moment and one that is difficult for larger banks to ply because, as lenders to struggling companies, they are often conflicted.

The emphasis on improved corporate governance has also favored the boutiques, according to JMP's Hecht.

"Boards of directors [want] a truly independent point of view when considering an acquisition and not just some large bank trying to earn a fee on the deal financing," he wrote.

The boutiques also like to stress that they have a lot of senior dealmakers who bring gravitas to a boardroom, such as Evercore founder and Chairman Roger Altman, a former Deputy Treasury Secretary in the Clinton Administration. They portray the large banks as being filled with cocky youngsters more eager to sell products than to listen to what their clients want.

"You're the same age as the board members, you're not someone who's just going through puberty," says John Studzinski, head of the advisory business of The Blackstone Group (BX), a giant private equity firm with certain boutique-like characteristics.

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