Merchant Banking - where do opportunities come from?

I’m potentially interested in recruiting for a role at a merchant bank. Group has under 20 people and invests in numerous sectors. I’m curious, how do these firms find new business / clients for both investments and advisory?


For potential investments, is it generally limited to inbounds from investment banks?

For advisory, how do senior partners find new opportunities/clients? 

For anyone who has worked at one of these firms, would you mind sharing what the the overall experience was like? 

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Worked in a sizable one. We had clear separation between investors and bankers and nobody did both. I think it's hard to do right but when done well it's a killer model. You source much less because you benefit from the bankers' network as well and it felt like we had access to every company in the world. Bankers benefit too because they can build better relationships, brag with the investment logos, sell services to portfolio companies etc. And equally investors can leverage bankers' market knowledge, use them for M&A and whatnot. Felt we genuinely had a unique value-add vs. million other growth investors. 100% helped us get our money in to some of the coolest names in the world. Very symbiotic. All on arms length of course and we got no special treatment + all systems were fully separated. Just because we both had same logo on the business cards didnt mean we get first dibs on deals bankers were advising. There was a lot of merchant banks in the golden days of finance, then they all split up, but now they seem to be coming back again. The main downside was that some banks just didn't want to show us deals because they felt our banking business was a competitor or could snag the deal or something ridiculous... I only learnt this after I left. But I really enjoyed it

 

The fact that groups were separate so one wouldn’t have to do both investing + advisory, is a selling point.

I knew a guy who got really tired from having to make investments, while also having to do sourcing and do advisory. Much better to focus on one area and be great at that

 

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