Why go from Elite Boutique to Bulge Bracket?

There is a massive amount of misinformation on this thread.

Let me take some misnomers one by one.

1. EBs are not a new phenomenon. Lazard has existed as an M&A specialist for the past 50 years, Blackstone had an M&A business for 30 years. In the 1990s, you had firms such as Wasserstein Perella and Wolfenson & Co., which was every bit as highly regarded as your Centerviews and Evercores. They had the same benefits and issues then as they do know.

2. It is almost impossible to become a great senior banker having grown up at a boutique investment bank. It doesn't happen. You can count the exceptions on one hand (Antonio Weiss at Lazard and Robert Pruzan at Wasserstein and almost no one else). The street is littered with the bodies of really strong execution bankers who make Director or Jr. MD at a boutique firm, and can't get the clients to be an effective partner. Even the ones who make MD and stick around are struggling. These guys are often 40+ years, have no real clients of their own, carry the bags of the real rainmakers who came from BB firms, and make maybe $1.5mm a year. Do you really want to be that guy?

3. A bulge bracket firm offers a lot more than financing to an aspiring MD. There are many other tangible advantages:

- the most significant is resources. When you are a sr. Vp or a Director or a junior MD at a BB firm, you have an army of junior people at your beck and call. That means you can spend a lot less time directing work yourself and call on a whole lot more clients, and develop a much larger rolodex. The comparable banker in a boutique is always bogged down on deal execution or putting their own pitchbooks together - you have a far greater network of information about what is happening in the market, which makes you more relevant to clients as you are making your bones. Never underestimate how lonely it is a boutique where you don't have a large group of colleagues around the world gathering relevant information - sponsor relationships. Sponsors really care very little about boutiques because the driving factor in any sponsor deal is leveraged finance. Its all very to be doing large corporate deals when you are an established MD but sponsor business is the lifeblood of one's career when its being built, and that accrues primarily to the BBs - finally, financing matters, a lot. Unless you are Frank Quattrone, you are not a relevant technology banker without the IPO product. I've discussed the leveraged finance product above. Its hard to really understand all forms of M&A without understanding financing, and most homegrown boutique bankers come up short

4. Conflicts of interest are part and parcel of life in banking. The way you answer the question on conflict of interest to a client is to say, "you have a lot of different ways to pay me, so I can be more objective about any single transaction given the long-term relationship". At boutiques, the only way you get paid is a successful M&A deal, so I'd argue the incentive is worse to push bad deals. But as I said earlier, there are always conflicts of interest. Good bankers manage them. Bad bankers don't know how. Good bankers get paid. Bad bankers don't.

5. I don't deny the advantages of working at a boutique as an analyst or associate, but all of those advantages become disadvantages the day you turn VP and become career killers the day you progress beyond VP. The truth is there is no real credible banking career path outside the BB (maybe some smaller or regional firms like William Blair or Stephens, etc., but that's a different kettle of fish)

6. Comp is higher at the boutiques at the analyst and associate level, probably equal at the VP level, and lower at other levels unless you are absolutely successful at the eat what you kill model. If a good group head at a BB is making $5-6mm a year annually, it is very hard to do that consistently at a boutique. That said, the upside is a lot higher at a boutique for the very top echelon (Blair Effron, Simon Robey, etc.)