Pay At Small, No-Name Boutiques (deals <500 M)

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Hi,

So basically, I was wondering what the pay is like for the small, no-name boutique banks that work on deals worth less than half a billion dollars at various levels? Does anyone have any clue about this, or does it vary too much to make a reasonable estimate? Obviously these guys will probably take a hit compared to BB analysts/MDs, but do they still make decent money relative to the rest of the population?

Also, I guess we can include small time PE shops in this equation as well.

Thanks

Comments (58)

 
Jul 27, 2010 - 1:25am

It varies way too much to generalize. Many small but well regarded MM M&A shops can pay their analysts above street for both base salary and bonus. However, I know of a ton of tiny 10 man firms that pay poorly. Totally depends.

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 
Jul 27, 2010 - 1:27am

Further - $500m is still a pretty high threshold. Show me a "no name" bank that gets $400mm mandates. At that level you're pitching against pretty much everyone you've ever heard of in the middle market.

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 
Jul 27, 2010 - 1:38am

I might be cranky or just a dick, but whenever I hear someone asking about pay at a boutique I automatically think they are ungrateful.

If you are looking at a no name boutique for a job it is because all else has failed. You should be smiling and worshiping the ground the MD's walks on to get paid 30K and get IB experience. You do a year or two in the trenches and then go to a larger firm and make some decent cash.

I mean if you don't like the idea of doing banking for 30K you could always go make 60K at a BB in their back office. When you phrase it like that pay really isn't an issue now is it.

 
Jul 27, 2010 - 1:54am

Oh damn, my bad guys. I must have misjudged how big deal sizes are even at BBs (I'm still a noob, so apologies), In retrospect, I probably shouldn't have mentioned deal size since I clearly have no idea what I'm talking about, but whatever you consider to be small deals, what do you think salaries are like at firms that handle those?

Anthony: You're fine man, and I hope I didn't offend you. Yes, I am looking at these shops as a last resort, but given my background and since I might never be able to break into a BB, I was just wondering if I can still have a decent career (to me, first year analyst + bonus at a BB is a lot of money) if I have to stay at those firms and never make it to a big bank. Believe me, I'm not a "models and bottles" chasing banker like a lot of people here, but in case my career doesn't allow me to exit, I should at least know what I'm getting into, right, or is that not a fair question still?

 
Jul 27, 2010 - 1:57am

No Name boutiques are a last resort for many people. Im sure the MD's know that and use it to their advantage. You are getting in for the experience and hoping that a sheer stroke of luck will land you an interview at Piper Jefferies. Anyways as Anthony said, Back office pay will most likely be 1.5 to 2x what you would get paid at a boutique. However the IBanking experience is pretty much priceless.

 
Jul 27, 2010 - 2:08am

cool - I was being a little bitch, its cool. Know what your getting into and all. Just saying that I see a lot of threads asking about pay and people being real concerned about the issue yet they do not understand that the experience is priceless. Boutique IB pay might be lower than street, but as Guest1655 said, the experience is priceless.

 
Jul 27, 2010 - 2:24am

Anthony .:
cool - I was being a little bitch, its cool. Know what your getting into and all. Just saying that I see a lot of threads asking about pay and people being real concerned about the issue yet they do not understand that the experience is priceless. Boutique IB pay might be lower than street, but as Guest1655 said, the experience is priceless.

Yeah, I know that the experience is really what matters, which is why I'm checking into these shops, and that itself is worth its weight in gold. For example, working at a small shop for 30k (even if it never increases) but learning a lot will be better salary-wise and in terms of job satisfaction than doing ops at a BB and eventually making above 6 figures. But in any case, I hope that no hard feelings were exchanged during all this. Maybe it's a good idea to lock this thread before it gets out of hand, especially since there is no concrete answer really?

 
Best Response
Jul 27, 2010 - 5:07am

First of all, small shops rarely hire anyone. They don't need analysts. Senior bankers/owners/partners do everything themselves.

I know a guy who does ONLY $5-$25MM M&A deals (sell-side start-ups). He is 38, works from home, and puts in about 40-50 hours/week. He makes more than any Senior VP @ BB-level. Let's call him John.

Every week John gets 5-8 e-mails from start-up guys asking for help. John is the only guy on a deal, and he charges 4-7% in fees. Sometimes the number goes up to 10%. That's anywhere from $350k(low end) to $1MM(high end) per deal. His fees are 1-2% higher than street's rates, but he has a solid record of selling companies. He does 3 (bad year) to 6 (good year) deals annually (still working 40-50 hours/week; he has kids and wife). He sells start-ups to other companies, ranging from no-name low-MM company to worldwide news publishers to manufacturers There is one downside: John is not only banker, but also an "entrepreneur". He eats what he kills: he doesn't have base/guarantee salary.

WSO is so fukking delusional it's ridiculous. VPs/MDs at BB make a portion of what VPs/MDs at comparable boutiques make. More prestige and fame? Yes. Higher pay? Unlikely.

Think about it. If "MM" shop closes an $800MM deal, even with 2.5% fees thats $20MM in cash. As my friend said once, "there is a reason why most talent eventually leaves BB."

That being said, BBs do offer prestige and name recognition. Everyone knows GS/MS/JPM, even farmers from cold Siberia, but outside of Finance world even Lazard/Greenhill/Evercore are unknown.

 
Jul 27, 2010 - 11:37pm

PussInBoots:
First of all, small shops rarely hire anyone. They don't need analysts. Senior bankers/owners/partners do everything themselves.

I know a guy who does ONLY $5-$25MM M&A deals (sell-side start-ups). He is 38, works from home, and puts in about 40-50 hours/week. He makes more than any Senior VP @ BB-level. Let's call him John.

Every week John gets 5-8 e-mails from start-up guys asking for help. John is the only guy on a deal, and he charges 4-7% in fees. Sometimes the number goes up to 10%. That's anywhere from $350k(low end) to $1MM(high end) per deal. His fees are 1-2% higher than street's rates, but he has a solid record of selling companies. He does 3 (bad year) to 6 (good year) deals annually (still working 40-50 hours/week; he has kids and wife). He sells start-ups to other companies, ranging from no-name low-MM company to worldwide news publishers to manufacturers There is one downside: John is not only banker, but also an "entrepreneur". He eats what he kills: he doesn't have base/guarantee salary.

WSO is so fukking delusional it's ridiculous. VPs/MDs at BB make a portion of what VPs/MDs at comparable boutiques make. More prestige and fame? Yes. Higher pay? Unlikely.

Think about it. If "MM" shop closes an $800MM deal, even with 2.5% fees thats $20MM in cash. As my friend said once, "there is a reason why most talent eventually leaves BB."

That being said, BBs do offer prestige and name recognition. Everyone knows GS/MS/JPM, even farmers from cold Siberia, but outside of Finance world even Lazard/Greenhill/Evercore are unknown.

great post, thank you for taking the time to clear this up for the people with no clue about how very small boutique shops function

 
Jul 27, 2010 - 4:52am

My ex college roommate works for a no name boutique that deals with companies ranging from 10mm-250mm and his starting salary was $55,000 two years ago. He recently got promoted to Associate at the same firm and they upped his salary to $90,000.

When he was an analyst his bonus was 50% of his salary (keep in mind these were the really shitty off years) and he worked about 50 hours per week (very little face time needed). Not too bad if you want to make more money than the majority of your college counterparts and also maintain somewhat of a work/life balance.

 
Jul 27, 2010 - 10:36am

It 100% depends on the bank. One thing to take note of is that small banks often have very lean deal teams. Typically with only an MD and 1 or 2 analysts/associates. The associates are often promoted from within without mbas. Also, a small bank has much more limited overhead. So if each MD is closing 2/3 deals a year with fees of 500k - 1mm per deal, that's a lot of money for not a lot of people. I worked at such a boutique and a few years ago, when the market was good, the young guys were getting equal to or more than bb guys in bonuses, with slightly lower salaries. However, recently with the down turn, bonuses have been pretty bad. The MDs know that you aren't working at GS but at the same time if you are good and have been at the firm for a while, they don't want to lose you. Once you have proven yourself you have way more value as a good analyst/associate at a smaller bank, meaning more leverage. They don't want to deal with the headache of you leaving and having to rehire and retrain someone. Its not like there is a system in place with a constant turn and training program.

The pie is smaller but there are a lot less people eating from it. Everything is relative.

 
Jul 27, 2010 - 3:44pm

Well, ke18sb is right - Everything is relative!

Ask somebody who is doing real estate math for some chit guy! If u don't understand number, u fall for such guys.. Compounding n discounting is what get you learn where to invest your time / money / energy for what Pay off..

But, i feel StartUps r kool. . m loving it..

Anthony is kool..

 
Jul 27, 2010 - 4:26pm

My two cents - worked at what most people would call a no-name boutique for a year...dc based ..about 20 bankers....1st year analysts in 07 pulled in north of 150k all-in (60k base) ....A3s hit 500k ...the same analyst promotes barely hit 100k all-in in 2009. The group primarily focused on M&A, so business was good during the good times ($1MM+ per banker) but when shit hit the fan in 2009, we were down to barely $200k per banker. So yes its very relative! I doubt if the swings are that much in BB though...

 
Jul 27, 2010 - 5:55pm

Get me some boutique! No one gives a shi* where you work other then people on wso. You say your an investment banker and its all the same. Why not go work at a boutique, work a lot less, and only make a little less. Sounds pretty ideal for me.

 
Jul 27, 2010 - 6:22pm

usdxctf:
Get me some boutique! No one gives a shi* where you work other then people on wso. You say your an investment banker and its all the same. Why not go work at a boutique, work a lot less, and only make a little less. Sounds pretty ideal for me.

This just isn't true. Maybe if doesn't matter to your family and maybe people on WSO care more then they should about prestige and whether or not GS would kick MS's ass in a M&A-off, but where you come from certainly matters just like the previous responsibilities you have had, just like the name of the firm you come from.

Given, at certain levels, the name carries less weight and has a diminishing value, but most 1st year analyst from a 5 man boutique shop are NOT getting scooped up by BB IBs because they are "investment bankers".

If I'm not mistaken, you are the same kid that says it doesn't matter at all whether you go to a target or a non-target because targets are just an editing tool by HR..which is silly also.

Regards

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so." - Ronald Reagan
 
Jul 27, 2010 - 6:37pm

Deal flow is what matters when it comes time to jump ship or move to a larger bank. You could be an associate at a smaller firm and come in as a seasoned analyst at a bigger one because of your limited experience.

Boutiques are fine and if you want to do banking at all costs then go for it and forget about the salary. As long as you get some exposure and do typical analyst job duties you will be able to lateral to another bank after a while. Granted, it will take you longer to do whatever you want to do than say the kid who went right to Morgan Stanley, but it is a lot better than taking the back office job and coming on here whining every day.

 
Jul 27, 2010 - 6:41pm

What i was saying is people who dont work on wall street dont care. Obviousely if you are in the industry it matters. I would just prefer to work in a boutique, work my tail off, and be able to communicate with everyone of all levels as well as having an actualy work life balance. If the only ft i get is with a bb, done, I go, but rite now I am really enjoying the boutique I just started interning at. We all want differnt things. I wish you luck in your first year in pe and that it continues to be a good provider for you cph

 
Jul 27, 2010 - 8:21pm

usdxctf:
What i was saying is people who dont work on wall street dont care. Obviousely if you are in the industry it matters. I would just prefer to work in a boutique, work my tail off, and be able to communicate with everyone of all levels as well as having an actualy work life balance. If the only ft i get is with a bb, done, I go, but rite now I am really enjoying the boutique I just started interning at. We all want differnt things. I wish you luck in your first year in pe and that it continues to be a good provider for you cph

Thanks and best of luck at your internship.

My intent is not to be the internet Nazi here, but just to point out that what you previously posted was misleading. You stated that no one gives a shit...when in fact it matters a lot. I see the point you are trying to make, but some people that come here looking for advice might not see, especially if they are new to the industry/site. Those that work in or are familiar with the industry know that what bank you work at doesn't matter to Joe Six-Pack because he doesn't even know what an investment banker is or what an investment banker does. Everyone here knows they have some simplified version (real estate agent) to explain to their aunts and uncles at Christmas time who just want tax advice or stock tips, lol.

You can do really well for yourself at boutiques, especially if NYC isn't really your style. You can get paid really well, live in lower cost cities, have a better work/life balance, etc. I'm at a boutique PE shop and enjoy it a lot. I BS with the 2 principals and 1 of the partners everyday. We talk about politics, sports, strippers, grab lunch, whatever and its great. With that said, I do realize the difficulties that lie ahead if I want to get into bigger, more prominent shops and people should just be aware that is a potential drawback along with some of the aforementioned advantages.

Regards

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so." - Ronald Reagan
 
Mar 18, 2012 - 6:27pm

cphbravo96:
usdxctf:
What i was saying is people who dont work on wall street dont care. Obviousely if you are in the industry it matters. I would just prefer to work in a boutique, work my tail off, and be able to communicate with everyone of all levels as well as having an actualy work life balance. If the only ft i get is with a bb, done, I go, but rite now I am really enjoying the boutique I just started interning at. We all want differnt things. I wish you luck in your first year in pe and that it continues to be a good provider for you cph

Thanks and best of luck at your internship.

My intent is not to be the internet Nazi here, but just to point out that what you previously posted was misleading. You stated that no one gives a shit...when in fact it matters a lot. I see the point you are trying to make, but some people that come here looking for advice might not see, especially if they are new to the industry/site. Those that work in or are familiar with the industry know that what bank you work at doesn't matter to Joe Six-Pack because he doesn't even know what an investment banker is or what an investment banker does. Everyone here knows they have some simplified version (real estate agent) to explain to their aunts and uncles at Christmas time who just want tax advice or stock tips, lol.

You can do really well for yourself at boutiques, especially if NYC isn't really your style. You can get paid really well, live in lower cost cities, have a better work/life balance, etc. I'm at a boutique PE shop and enjoy it a lot. I BS with the 2 principals and 1 of the partners everyday. We talk about politics, sports, strippers, grab lunch, whatever and its great. With that said, I do realize the difficulties that lie ahead if I want to get into bigger, more prominent shops and people should just be aware that is a potential drawback along with some of the aforementioned advantages.

Regards


I would argue to some people it matters...I personally enjoy banking so working at a small MM or boutique is great for me

__________________________________________________- get on my level
 
Jul 27, 2010 - 8:32pm

My friend works at a boutique that works on 50 - 400MM, with the vast majority in the 50 - 100MM range. First year analyst @ 50K + 10 - 50% bonus. He said ~60 hours a week, so significantly better hours, and given the location in denver, a significantly better lifestyle. I would argue that 70k in NY is 50K in Denver. Bonus #s of course skew this analysis.

 
Jul 29, 2010 - 11:41am

sk8247365:
My friend works at a boutique that works on 50 - 400MM, with the vast majority in the 50 - 100MM range. First year analyst @ 50K + 10 - 50% bonus. He said ~60 hours a week, so significantly better hours, and given the location in denver, a significantly better lifestyle. I would argue that 70k in NY is 50K in Denver. Bonus #s of course skew this analysis.

Sounds like St. Charles or possibly GMB? Either way, that's pretty accurate as far as compensation is concerned in Denver for a boutique. Hours seem a little low though - would have guessed 65-75 on avg. Q-Advisors has hours probably closer to 60 on avg.

 
Jul 29, 2010 - 6:37pm

"No-Name" boutiques do extremely small deals. $500M is too big for MMs these days, that's the bulge range now. "No-names" have a lean team and might be happy with 2-3 deals a year. They are more likely to do private placement raises, which involves a lot of investor tracking, calling potential investors, doing memos, PPMs, etc. They also do some small M&A, though occasionally get lucky with bigger deals.

Their work hours are usually much better because so many of them make you (the analyst / associate) do sourcing (i.e. cold call for prospects), and there's not that many calls you can make after-hours. There are other boutiques who have tremendous deal flow and not as much pitching, but they're volume shops. All depends on the MDs.

The pay is almost always smaller overall. Usually not by a whole lot, but there are a couple of shops that notoriously screw you over.

In the recent environment, many MM analysts were able to move up to BBs as hiring has improved and the BBs realized they underhired. This has made many MMs look at replacements at the regional boutique level because these guys would at least be grateful to move up. So lateral moves are always a possibility.

 
Jun 14, 2011 - 1:02am

Know someone who's going to be at a 5-man boutique in a mid-sized, fairly inexpensive city. Comp is supposed to be ~50+5 then perf bonus 15-30k.

Not BB money but you can do pretty well and as others have said eventually lateral to somewhere else as a 2nd or 3rd year analyst.

 
Jun 14, 2011 - 11:41am

NestoGrande:
Know someone who's going to be at a 5-man boutique in a mid-sized, fairly inexpensive city. Comp is supposed to be ~50+5 then perf bonus 15-30k.

Not BB money but you can do pretty well and as others have said eventually lateral to somewhere else as a 2nd or 3rd year analyst.

Sounds like a good deal. I wonder how the hours are like at these shops.

 
Jun 14, 2011 - 9:41pm

oldmansacks:
NestoGrande:
Know someone who's going to be at a 5-man boutique in a mid-sized, fairly inexpensive city. Comp is supposed to be ~50+5 then perf bonus 15-30k.

Not BB money but you can do pretty well and as others have said eventually lateral to somewhere else as a 2nd or 3rd year analyst.

Sounds like a good deal. I wonder how the hours are like at these shops.

About 60 a week. 830-830 on average. Nice for banking and that comp package takes you far somewhere that isn't NYC. The big difference IMO is exit ops.

 
Jun 14, 2011 - 1:02pm

I'm at a tiny shop and the hours are great. 9-8 most days. If we're waiting on something hot 9-12. But rarely any weekend work (unless you really need to catch up on some shit). I'm an intern BTW.

But I think i'd take a BB for a few years just to have it on my resume, and if I hated it, I'd probably lateral into a small shop.

Super Nintendo, Sega Genesis - when I was dead broke man I couldn't picture this
 
Jun 14, 2011 - 1:32pm

I'm at a similar sized shop with only one analyst but most of the guys are out by 6:30-7:30 sometimes 8or9 with a a weekend here or there....not sure how this is at other firms with similar size deals.

the starting pay here is 50k+around 50%-60% bonus..maybe more on good years. and i think bonuses are paid out after each deal close.

 
Mar 18, 2012 - 8:27pm

I worked at a smaller MM (50 man shop), there is a huge difference in culture between that and the bank that my cousin works at. If you're going to be a lifer working at an MM in DC/Boston/Miami/Atlanta or fill-in the bigger non-NYC-LA-SF-Chicago market it can be great, better people, good pay on a relative basis and a better environment imo.

 
Mar 18, 2012 - 8:28pm

An "acceptable" discount to street pay at a no-name boutique? (Originally Posted: 03/06/2007)

For analyst, 60+10 seems to be street for '07 judging by the other analyst pay thread. I assume a MINIMUM bonus of 30k up to maybe 80k. This gives a range of 100k to 150k for STREET.

As a result, for those of us trying to "break in" to IB, what is an acceptable discount to street FROM A NO-NAME BOUTIQUE pay before you start raising red flags? By red flags, I mean if a bank offered 35k in salary, I am pretty sure that would create a problem, not because of the pay, but because I would say "what exactly am I going to be doing for this company?"

So what is acceptable for salary? 45 + 0? 50 + 5? Is there any POSSIBLE way to discuss potential bonus and/or a bank's discount to street BEFORE accepting an offer?

Would love to hear from some boutique bankers...

 
Mar 18, 2012 - 8:34pm

I am at a no-name boutique, 2nd year analyst. Base is better than street. Bonus has been at or better than street historically but is much more sensitive to deal flow. It has been a slow year for our group due to some MD's leaving so bonuses have not been paid yet. I wouldn't take less than street, there are plenty of no name boutiques out there. Find one willing to pay you what you're worth.

 
Mar 18, 2012 - 8:36pm

AnonymousAnalyst:
It has been a slow year for our group due to some MD's leaving so bonuses have not been paid yet.

What?!

See, this is why you're working at a no-name. They can't even pay you on time and probably not even consistently. If anything, the uncertainty warrants a slight premium (being sarcastic).

 
Mar 18, 2012 - 8:35pm

Well, I would think for most analysts at no-name boutiques, what they are worth is a substantial amount less than what a BB analyst is worth, and my qualifications are no exception.

Anonymous, why would you say they pay you above street? Are you THAT qualified? Do they work you harder than BB? Do you have more client exposure and thus value added?

 
Mar 18, 2012 - 8:37pm

djia5000:
Well, I would think for most analysts at no-name boutiques, what they are worth is a substantial amount less than what a BB analyst is worth, and my qualifications are no exception.

Anonymous, why would you say they pay you above street? Are you THAT qualified? Do they work you harder than BB? Do you have more client exposure and thus value added?

I've seen it happen before. A guy from a no-namer got hammered where I worked before. Nice guy, just didn't have the horsepower.

 
Mar 18, 2012 - 8:42pm

Thats probably true, optical. But how many of them would jump ship after a few months? Kids who have not had an at least semi-intense education would probably get frustrated easier at the material and not be used to the hours. Now you have got to retrain a whole new class every year (or worse, mid-year), and the work quality of the entire firm suffers. Saving a few 100k in bonuses (for a boutique) is not worth that.

 
Mar 18, 2012 - 8:43pm

djia5000:
Thats probably true, optical. But how many of them would jump ship after a few months? Kids who have not had an at least semi-intense education would probably get frustrated easier at the material and not be used to the hours. Now you have got to retrain a whole new class every year (or worse, mid-year), and the work quality of the entire firm suffers. Saving a few 100k in bonuses (for a boutique) is not worth that.

Very true and I agree... if I ran a boutique, I'd pay street b/c the headaches saved would be incalculable. You need to find the "right balance" between pay and quality. But then again, you if you pay 80K/YR (all-in) @ 70hrs/week, which is LOW pay & hrs, you could do it. So, does being at the boutique warrant a premium (probably not)?

 
Mar 18, 2012 - 8:45pm

What do you mean by "boutique"? If you mean EB, Greenhill had revenues of $274 million in 2014, and I am pretty sure they pay street. These small "no name" boutiques probably pay less. I worked at one for a year and know people who have worked at others. Expect $70,000-$80,000 all in. Base salary is usually $50,000 to $60,000 with bonuses being $20,000 to $30,000. Some pay less.

 
Mar 18, 2012 - 8:46pm
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