Hey monkeys,
I attended a firm's campus presentation today, and one of the slides said the following:
On the advisor side to world's largest multinational firms, as opposed to the creditor side
Can someone explain what this means to me? This was an elite boutique firm, and I don't see how they could ever be on the creditor side (as they don't have a balance sheet).
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That's the exact point ... they are saying that they only advise they do not loan money (creditor)
Just to test my understanding: under what instance would a firm engaged in a typical sell-side M&A transaction require a creditor? I'm guessing that the acquirer of the firm being sold might require a creditor if it doesn't have the capital to purchase the firm outright?
Sellside process would not per say need a creditor. It is mainly on the buyside where a bank like BAML or JPM can provide both the advisory services and the financing services (new term loan, bridge financing, etc.). Think of the advisor fee and the financing fee as separate. Not uncommon for a shop like that only does advisory to assist the company in finding a suitable financing partner as well.
Rewrite the original point as: "We are an advisor to some of the world's biggest banks, not the banker." You can imagine that their could be a conflict of interest when the person advising you is also making money on how much debt you are taking on in a transaction.
*there could be a conflict ...
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