Why did EVR succeed vs GHL or PWP that ended up getting acquired?
Curious to hear thoughts on this. EVR is clearly the role model of a successful EB that has (for now) passed the test of time. On the other hand, GHL, which was founded about the same time as EVR and was actually considered more successful up until the mid/late 2010s, did not. Now, PWP is about to go the same path (even though it was founded a decade later).
There is clearly a trend here and it would not be surprising if MOE will also go down the same path, especially after Ken's retirement last year.
Bump, also interested
PWP and GHL focused on corporate clients and did not ride the wave of PE bonanza from 2016 to 2021 // EVR on the other hand did
Eh, I think it is deeper than that. Centerview has flourished despite largely eschewing the sponsor world.
In my view, the world and market for diversified M&A boutiques in not large enough to accommodate all of these elite boutiques and middle market firms, particularly when head count has exploded in recent years. PWP never had a niche industry it dominated like Moelis in media, Centerview in health care, etc. It also didn't have a differentiated enough strategy in the way a Moelis has dominated with sponsor sell sides, PJT dominating with rx, and Evercore being the 600 gorilla everything boutique that rivals the bulges. It doesn't even dominate in its stated strategy of working with strategic on high level advisory; Centerview does.
Couple that with an archaic partnership structure that doesn't really lend itself to internal promotion all the way up the ladder and the newly found pressures of going public into an M&A downturn and you can see why they never struck it out of the park. I think the only shocking thing here is that it took them this long to realize the position they were in.
I think this hits the nail on the head
What I also think that let Evercore survive on its own is having something resembling a capital markets/cap markets advisory service a traditional "bank" would have, while PWP and GHL (pre-Mizuho) have been resistant to establishing anything of that sort. Unless you are crushing it from a broad M&A standpoint (not just being above average "per capita") or are specialized whale hunters like Dyal, this is no longer a sustainable model
Are you saying the whole narrative around "pure advisory, no conflict of interest" is a dead business model?
I’d actually argue the opposite. Capital markets is a pretty good example of where the independent model works, EVR gets brought in alongside the underwriting banks to give an independent view on bank selection, structure, timing, pricing, allocations, fees etc. Same logic on debt: advise on capital structure and financing without having a balance sheet to push.
So really the model has expanded way beyond pure M&A. Add restructuring, activism defence and secondaries (!!) to the mix, all without a BS, and it’s actually a pretty compelling combo which is bound to last
.
I think scale and diversification were the biggest factors. EVR built a stronger, broader platform and kept compounding its senior banker franchise, while GHL and PWP faced more pressure from revenue volatility and the economics of staying independent.
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