The Qualifications of an EB
After seeing people complain about what amounts to an EB today, I thought it'd be interesting to see what all of you think belong as an EB, which WSO seems to consider to be CVP, PJT,, , , PWP, and . That being said, just some points to ponder...
1) Is the EB qualification based on exit opps? If so, I can definitely see why that list of firm is considered the list of EBs. However, even among the list, there is a very large variance of exit opps from Evercore to Greenhill.
2) If not exit opps, what makes an EB and EB? Just some points of discussion:
EBs are all independent investment banks, but not all EBs are pure advisory shops now. Lazard obviously has AM, Evercore has S&I believe, while other EBs like CVP are still pure advisory shops. EBs are quite different in terms of their business model, and are far from the days of just being pure advisory private partnerships.
Does size determine EB? The smallest EB on the list is currently CVP, which has around 400 bankers, while Lazard has well over 3k bankers if I'm not mistaken, so the "consensus" EBs vary wildly in terms of size. If size isn't an object, why aren't top firms that advise on blue-chip transactions that are even smaller like Allen & Co (150ish bankers) or Qatalyst (60-70ish bankers) included?
Does deal size determine EB status? On the list, Evercore/PJT/CVP have consistently over the past 5 years separated themselves from the other EBs in terms of their average deal size. Those 3 firms, especially CVP and PJT, tend to focus on advising fewer deals, but also advising on more of the blue-chip transactions. The other EBs, especiallyand Lazard, tend to be volume shops and their transactions skew much more towards the MM end. Considering how different Moelis's and CVP's strategies are, why are they both considered EBs?
while most other EBs on the list are consistently scattered around top 25 in league tables, Greenhill has struggled to crack the top 50 list consistently over the past decade, so why is Greenhill considered to be on the same tier?
Isan EB? Guggenheim's consistently managed to place in the top 25 of league tables throughout the past 5 years, and while most of their deals are MM deals they also get their name on a healthy handful of mid-cap and large-cap deals every year.
Isan EB? Jefferies is the largest independent investment bank, and is consistently top 15 in league tables, and in terms of size and headcount Jefferies is roughly at where Lazard is. The average deal size of Jefferies is just below Moelis's average deal size, and Jefferies also advises on its fair share of mid-cap and mega-cap deals. In terms of size and volume its deal flow is roughly close to Moelis and Lazard.
Interested to hear all of your thoughts.