Confused about the difference between Advisory/Corporate Finance/Investment Banking
Currently working in a mid-size accounting firm in London and looking to transfer to our 'corporate finance' department. The department works on M&A, Valuations, Due Diligence/Transaction Services along with a couple other things (Restructuring/Insolvency). The firm has 100 employees in a City of London Office.
What is the difference, firstly, between the advisory work that this department does compared to, say, a boutique regional investment bank? Do the people in the corporate finance departments of accounting firms refer to themselves as Accountants? Bankers?
Secondly, what would be the difference between a boutique regional investment bank and a purely 'advisory' firm and how do I spot the differences between the two? I see firms offering M&A advisory services for example, however with no mention of being an investment bank.
Would there big significant differences in compensation/deal size between the above?
I know every Corporate Finance organisation in the UK. These are usually divisions of large accountancy firms (examples: PwC, Deloitte etc., but also Francis Clark, RSM, Larking Gowen), but not always.
Over the last ten years or so there have been several small groups of accountants who've formed CF businesses and do exclusively CF work (Examples: Strategic Corporate Finance, Gambit, JDC).
The people in the smaller firms refer to themselves as "partners" or "directors" rather than accountants. They are competing for business with the likes of business brokers (BCMS, Bluebox, KBS etc) and so don't emphasise their accountancy pedigree.
Some of these CF firms provide just advisory services - debt restructuring type of advice. Others take on business disposal transactions. This could involve selling the business on behalf of the owners or it could be other equity exits (IPOs, MBOs, MBIs, VIMBOs....). In the case of business disposal they advice on preparation of the business for sale, creating the Information Memorandum, attracting M&A players/PE firms/other investors and negotiating the deal on behalf of the vendors. They typically charge 40K-50K on signup with a 2% to 5% commission on the final sale price and take on businesses in the lower mid-market ... anywhere from deal values of circa 1m to about 20m.
Investment banks tend to work on mid-cap deals, very firmly in the 50m+ category.
With respect compensation, it's difficult to comment without knowing what your skills are, your level of experience, your qualifications etc.