What’s your thought on the dynamic of bulge brackets moving into middle market territory?
Overall fees to the street have been declining YoY and EBs are gaining market share in the M&A world (particularly large cap deals). This is forcing BBs (GS, JPM, Baml to name a few) to enter the traditional middle market territory. Some have even opened up entire divisions focused on MM (why not just consolidate them into the same team?).
Is this temporary until fees rebound? Will the likes of HW, Baird and William Blair hold on to their share? Are bonuses screwed?
Big banks announce this type of stuff every few years, will amount to nothing. Plus who would want to go to GS from a boutique and work on small deals. Much better at a boutique working on mid-market deals. Nothing to worry about.
“who would want to go to GS from a boutique and work on small deals“
GS just started their cross market group focusing on $500mm-$2bn deals I wouldn’t call this ”small”. (But at the same time $1bn+ doesnt sound like a MM deal to begin with)
If I’m an analyst working at HW/WB/HL/RJ if the new groups at GS are legit I’d def consider it.
I think it would still serve analysts or associates well to work on these middle market deals in one their regional offices. Still have the GS brand regardless of the deal size.... just my opinion tho
This happens a lot in tech where BBs go after MM companies because they think they will be worth billions in the future and want to develop a relationship early on for a potential future IPO or M&A or capital raise opp.
I think one thing people forget is that even the banks that aren’t particularly focusing on MM deals still do smaller deals. Take the top M&A groups for example, they still work on deals below $500MM if the large fee is there. Healthcare deals for example are sometimes small but have high fees ($150-400MM range)
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