Bulge Bracket Investment Banks

Austin Anderson

Reviewed by

Austin Anderson

Expertise: Consulting | Data Analysis


April 15, 2022

“Bulge Bracket” (BB) is a term that describes the largest, most established investment banks in the world. These firms have a multitude of different financial services across the globe but are most notably known for their prestigious investment banking divisions. They generally employ tens of thousands of employees around the globe, offering a wide variety of services internationally. What differentiates BBs from other firms are their size, the products they offer, and the clients they advise.

The name "bulge bracket" originates from the manner in which investment banks are listed on the public notification of a financial deal or transaction - or the "tombstone." The book-running manager, or a bank with control of security allocation to investors, is listed above all others and on the prospectus cover. The printing size of the font for this firm is larger than the others and tends to "bulge" out. These banks tend to be the largest banks, and thus have been referred to as the Bulge Bracket.

Banks such as Wells Fargo, HSBC, TD Bank, RBC, and Mizuho are similar in size to BB banks, but may not offer as many services or do not have as much revenue. They certainly are not middle-market firms either, and sort of exist in an unnamed category of their own between the two.

Bulge Bracket Firm List

The BBs are generally considered to be the most well-known, largest, and established banks in the world. Some of these firms are:

Some defunct BBs include Lehman Brothers and Bear Stearns, whose investment banking divisions revenue alone rivaled that of Goldman Sachs and J.P Morgan in their heyday.

Bulge Bracket Services and Clients


BB firms offer multiple services. However, they are most known for offering Investment Banking services as part of their core services, such as mergers and acquisitions (M&A), restructuring, advisory, capital markets, and leveraged finance

The clients of BB investment banking are large corporations and governments. They tend to take on the largest clients and work on the most valuable of all IB deals. For example, BB firms Morgan Stanley, JP Morgan, CitiGroup, and Bank of America advised on AT&T's massive $85 billion acquisition of TimeWarner Cable.

To put it simply, most smaller boutique and middle-market firms do not have the manpower or experience to take on such massive deals, although some mid-sized firms known as Elite Boutiques do. Many middle-market and boutique firms never do $85 billion deal value transactions in their existence, yet such deals are commonplace in the world of BB investment banking.

TimeWarner and AT&T merger

BB firms often offer the following services as part of their service offerings:

Investment Banking

Goldman Sachs is widely considered to have the best and most experienced IBD, followed by Morgan Stanley and J.P Morgan. These three firms have top clients, work on the largest deals, and have bankers that are the most experienced in all of Wall Street.

However, many bankers find these firms to be too big, and some managing directors leave to start their own boutique investment bank focusing on smaller-sized deals after decades of working at a single top firm.

Apart from M&A, BB’s have very strong capital markets groups, which help clients raise large amounts of money through debt and equity capital markets.

BB firms are also very selective when recruiting for their investment banking divisions. They tend to hire from a very narrow range of schools known as target schools. These colleges and universities tend to be elite, prestigious, and hard to get into, and their students are the preferred candidates of BB investment banks. Included in this group are schools such as Harvard, Wharton, Stanford, University of Michigan, and NYU.

These firms are so selective because they look to hire people who are well-rounded and self-starters. Candidates meeting this criterion tend to attend target schools since these schools themselves are selective and have a high standard of entry.

BB firms also get hundreds, if not thousands of applications for a single position, hence selective recruiting is a good way to narrow a candidate list. BBs and investment banks, in general, aren't as selective for their other front-office divisions, but still tend to hire from top schools when they can.

Equity Research

Another major division of these firms is their equity research divisions. Equity research firms conduct research and due diligence in stocks within their sector and sell that information to buy-side firms. This research is also used to support IBD activities. They are employers of some of the most well-known and respected research analysts, such as Morgan Stanley’s Adam Jonas.

For four years in a row, J.P Morgan research analysts topped the leaderboards of the all-American research team, a yearly ranking of top research analysts.

Private Equity 

Some BB firms also have internal Private Equity teams, such as Goldman Sachs’ Capital Partners, and JP Morgan’s Private Equity Group. These groups engage in leveraged buyouts of companies to generate a profit for the firm's partners.

These internal PE groups, however prestigious, are often overlooked by IB analysts looking to move to the PE space, in favor of the other private equity megafunds, such as KKR, Apollo, and Blackstone. These internal PE teams however do hold clout and compete in deal sizes that can rival some top PE firms.

Retail Banking

Few BB firms have retail banking units, however, for those that do, it is one of their largest businesses. BBs having retail banking divisions include JP Morgan Chase, Bank of America, and CitiBank. These banks offer retail banking services to individuals, such as personal banking, checking and savings accounts, Credit cards, CD’s and small loans, generally in a local location.

These are the banks down the street, or around your town. Other firms like Morgan Stanley and Credit Suisse do not have a retail component and do not generally deal with the public.

Asset and Wealth Management 

BB firms also have extensive asset and wealth management groups. Firms like Goldman Sachs asset management and J.P Morgan asset management have hundreds of billions of dollars under management. These groups handle the investments of their clients. AM and WM clients tend to be high net worth individuals, corporations, and endowment funds.

Despite their large size, AM divisions at BBs tend to be dwarfed by large asset management firms, such as Blackrock which has an AUM of over $10 trillion.

Sales & Trading 

S&T analysts sell their firm's products to potential clients. S&T groups also discuss securities with clients, who tend to be large institutions such as hedge funds and other institutional investors. 

Corporate and Commercial Banking

Corporate and commercial banking divisions offer lending services to business clients. Large international corporations tend to be clients of corporate banking groups, and smaller businesses, as well as startups, are clients of commercial bankers. 

These teams are staffed by front office relationship managers, and corporate/commercial bankers, along with many credit analysts who determine the worthiness of clients to borrow money from the firm.

Other Services 

While BB investment banks typically offer both financing and advisory banking services, other services they offer include market-making, sales, and research for a large range of financial products like credit, equities, commodities, and derivatives. They also tend to be very involved in creating novel financial products like mortgage-backed securities, carbon emission trading, credit default swaps, and insurance products. They are also among the primary dealers in U.S. treasuries.

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