What’s an EB?

Question says it all. What are y'all basing this off of? According to the Factset's YTD league tables, judging by announced deals, Lion Tree's average transaction value of $3.7B is at par or far above the top 5 performing boutiques (Top 5 from a total transaction value perspective), which are, in order, EVR (2.68B), PWP (2.70B), CVP (2.33B), PJT (3.78B), GUGG (2.30B) this year.

Meanwhile, firms that WSO loves like MOCO (818.95M) and Lazard (1.16B) are performing (in terms of average deal size) much closer to firms like Stiefel/KBW (673.48M), Nomura (1.94B), BMO (2.13B), and Roth (830.21B) who clearly don't get the same love around here.Where do y'all draw the line between MM and EB?

No shade on anyone's bank, I'm just curious about this.

Comments (22)

  • Intern in IB-M&A
Nov 8, 2021 - 2:45pm

LT and other industry specific boutiques like Qatalyst, Allen & Co and Raine clearly punch above their weight in terms of deal size relative to their small size but aren't bucketed as EBs on this forum because of their small size and narrow focus. EVR, MOE, PJT and other EBs cover most industries and have headcounts near or above 1,000 while the boutiques I listed all have headcounts of around 100 or less. Given their size and scope, EBs also tend to have more consistency in their overall advisory transaction value whereas the boutiques, though they regularly advise on 1B+ deals, tend to see greater variance year to year (again, because of their industry focus). If we're going to keep using the EB label on this forum, I think we should add a new term to the banking nomenclature to better differentiate between these industry specific boutiques and the larger independent advisory shops: elite industry boutique (EIB)

Nov 8, 2021 - 3:00pm

So where would you place a firm like MOE or LAZ who's avg deal size this year is nearly 3x and 2x (respectively) smaller than GUGG which, until very recently, was regarded as an MM shop - despite doing almost twice as many deals.

I know all three firms regularly play in the MM space and GUGG even has two dedicated MM offices.

Given that they should be protected from such variations too, how is it feasible to put them in a different bucket than PJS or (probably a better comp) Roth? At least from an analyst experience point of view.

  • Intern in IB-M&A
Nov 8, 2021 - 3:19pm

I would still classify MOE, LAZ and Gugg as EBs

I think EB really refers to the independent advisories which regularly advise on mid to large cap deals. Though it's no secret that MOE, LAZ, Gugg and others regularly play in the MM space (I've even seen EVR on some LMM deals), I think they're different from MM firms like PJS and Roth in that they don't entirely focus their efforts in the MM. Correct me if I'm wrong but I'm under the impression that firms like PJS and Roth are focused on small cap deals (~200mm - 2b) within the MM

Nov 8, 2021 - 4:31pm

EB = exclusive bank, hard to get into and prestigious

MM = for the masses and middle class, easy to get into due to big headcounts and unprestigious even if they have better deal flow or comp

Nov 8, 2021 - 10:26pm

I love these comments. The classic "My entire personality is actually finance and more specifically the bank I work at" (assuming you're actually in IBD) while having the lack of self awareness to then pontificate on why people don't hang out with you and why you consistently have zero prospects of getting laid. Life isn't all about work, but I hope jerking to your linkedin title every day makes it worth it, friend. 

  • Analyst 1 in IB-M&A
Nov 8, 2021 - 4:54pm

Was speaking to an MD at my bank (which is something in that in between space of Jef/Gugg/Roth etc) and he said the important metric is revenue per MD, not average deal size. I'm an analyst so don't know any of the numbers at these banks, but I assume Moelis' revenue per MD looks very different from KBW/Stifel etc

If you have MDs pulling in 5 800M transactions a year, that's better than an MD who does 1 2B a year.

Also, average deal volume can get distorted by random ECM deals/buy sides/co advisors etc that distort the averages, whereas as fees are what counts at the end of the day

  • Principal in PE - LBOs
Nov 8, 2021 - 6:25pm

In the Industry, advisory Revenue/MD is actually pretty similar across the premier boutiques and MMs, with BBs quite a bit lower (not due to performance, just due to the bloated nature of BBs), once you adjust by removing non-advisory MDs. On paper, boutiques will have a higher revenue per MD due to their advisory and lean nature, but you'll notice through comparing public investor presentations that even including non-pure advisory MDs, public MMs like HL and JEF still have a similar advisory revenue/MD metric. I also did run the numbers for Stifel, and they were lower than the public EBs and top MMs but they weren't much lower.

That being said, I'd imagine that CVP blows all the public EBs out of the water in terms of Revenue/MD. 

  • Associate 1 in IB - Gen
Nov 8, 2021 - 11:02pm

In the case of Lazard, I am pretty sure FactSet is also picking up Lazard Middle Market (LMM) deals which, unsurprisingly, are smaller middle-market deals. From what my friends tell me the LMM group is a completely separate team that sits in different locations/offices.

  • Prospect in IB - Gen
Nov 8, 2021 - 11:13pm

You can see traditional LAZ and LAZ LMM transactions built out separately on their website and traditional LAZ does a significant amount of MM and LMM. Their avg deal val is most definitely below the 5 boutiques mentioned in the post

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  • Analyst 1 in IB-M&A
Nov 9, 2021 - 12:38am

The lesson is once you get a job no one cares, and these distinctions are meaningless. No one at banks actually says EB. BB is a real term based on their balance sheets, not some elite division of banks.

I work at a top MM and we pitch against "true EBs" like evercore, Moelis, and Lazard all the time, we pitch against BBs, we pitch against in-between banks like Jeff/Gugg, and we pitch against smaller MMs that no on one on here talks about. We frequently beat BBs and EBs, and we (and EBs and BBs) sometimes lose to some random regional boutique that has a relationship to the founder. Have seen multiple pitches where my bank (which is solid, but not something people are on here jerking off over) beats a bank like GS or Evercore on a pitch, or we lose to some bank that a bunch of college freshman on this site would say is inferior to mine.

My point is the distinctions are meaningless. Unless you're at Centerview or GSTMT or similar or you get extremely lucky with staffing, chances are you'll be working the same exact $500-2B range that all of us are working at any bank. Maybe if you're at an EB you're on the higher end of that range, and if you're at a MM you're on the lower end, but at the end of the day it's all similar and the fact is the vast majority of deals are in that range so shockingly enough, that's where most banks target

  • Associate 1 in IB - Cov
Nov 11, 2021 - 10:29am

We can end this thread now lol...It's truly insane how much different the real world is vs what goes on on this website. 

Nov 13, 2021 - 9:22am

Accusantium quae nulla et non blanditiis. Unde et facere molestiae et error. Maiores veritatis quo suscipit quidem et. Iure explicabo et aut.

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