Noticed that many of the top firms from the 1900s were mostly gone or consumed by the 2010s. Will this wave of EB banks like Evercore CVP have success after their founders leave or will they be in a similar situation?
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Many EBs eventually lose momentum over time as they go through more and more leadership transitions (Gleacher and Greenhill immediately come to mind). The thing is, unlike Balance sheet banks, EBs effectively have one product: advice. Advice is built on relationships of the seniors there, so EB platforms rely on their ability to retain and attract top talent, unlike BB platforms which offer many products to clients, and many EBs aren’t able to effectively retain talent after a while because the direction senior management (looking at you Scott Bok) sets simply isn’t attractive enough for rainmakers to either come over to the EB or for rainmakers at the EB to resist the generous comp packages other banks are offering to poach them away.
It’ll remain to be seen if the “new generation” of EBs (Moelis, PJT, CVP, PWP) can maintain their momentum in the decades to follow. Of course, Lazard is the most notable EB that has withstood the test of time, and I’m pretty bullish on Evercore as they’ve been able to seamlessly navigate a leadership transition and seem to be gaining momentum.
Tbh, Greenhill management didn't do anything that was negative, Bok & Co simply lost the drive that Robert Greenhill had.
IB is a cutthroat business. A lot of people think that rainmakers can just chill once they've built their rolodex and get called up by their clients automatically, but that's really not the case. In IB, everyone is always trying to steal everyone else's clients, and it takes constant vigilance to retain relationships. And Robert Greenhill epitomized that (talk to anyone on the street who was familiar with him and they'll likely be able to tell you some stories about his work ethic and drive to always be there for his clients).
Scott Bok hired aggressively in the mid 2000s, but he hired a lot of newer MDs from competitors rather than splash the cash on proven rainmakers. Unfortunately, Greenhill wasn't able to capitalize on the boom in independent IB post-GFC, and lost momentum, and as they lost momentum, their best MDs left, resulting in them losing even more momentum. I really don't think Bok has the drive that Greenhill had (which I guess is somewhat understandable as the firm isn't Bok's baby). Greenhill's super generous dividends don't exactly help either, as many of the MDs hold a lot of Greenhill stock and can coast by with dividends (Bok received $1.4M from dividends alone in 2016, which was more than twice his $600k salary).
Lol the Greenhill analysts came out of the woodwork to throw MS
Depends on a lot of factors related to leadership as others have mentioned. Here are my predictions. Including some Regular boutiques and MMs as well that I think are relevant.
Well-established:
Evr, Laz, Jefferies (on the upswing as of late), Rothschild, HL (will always be able to rely on RX)
Very likely to be successful long term:
PJT (ex-BX), CVP, Q (tech industry is huge), Harris Williams (sufficiently differentiated as the “boutique” MM and backed by PNC)
50-50 (plenty of opportunity for m&a consolidation amongst these banks down the line):
Moelis (debated putting them here or up a tier), Guggenheim, Perella, LionTree (less established than Q), Allen (being so secretive can’t be helpful), Ardea, Broadhaven, Raine, FT Partners, Marathon, Lincoln, Leerink, Dyal, etc
Flailing:
Greenhill
Forget all this EB talk... all I'm saying is JP Morgan will outlast the CCP