These are going to have much higher compensation than the average boutique. all of these firms are quite elite... while they may be considered "boutique" because of size, they do some meaty deals.

 

I'm curious to know the difference in comp between the BB's and Boutiques too. Most (if not all?) of the boutiques listed above don't have the balance sheets to drive deals and focus on pure advisory so you would think that their comp would be less because of their lack of ecm / dcm business. But on the flip, the revenue per banker would be much higher for boutiques because they don't have as many staff and this would probably flow through to bonuses as well. They also would presumably have less overheads. The reason I ask is because everyone needs to make this choice at some stage in their career: boutique or BB and whilst the work in boutiques would probably be more interesting as opposed to some of the BB's who would spend 70% of their time marketing ideas, you need to look at what your end game is. If it's money, then the above question regarding comp differences becomes important because you are going to be inclined to endure the marketing boredom if the incremental bonus from your underwriting deals is significant.

 

Boutiques can vary widely. Most pay street ($60k) or a bit (max 10%) above. Some smaller, lesser known boutiques may pay up to 20% or so less.

  • Capt K
- 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
 
boutiquebank4life:
Moelis is 10k, have a friend there.

Jef is not a boutique either and WF is not middle market.

I agree, JEF is full-service with a focus on middle-market. WF is not MM in debt and equity offering, but in M&A they do a large number of mid-market deals. The majority of their advisory business is generated from Barrington Associates, which was def an MM and was acquired by WF last year (they were a subsidiary of WF before the acquisition)

Would it be fair to say that those solid MMs pay handsome bonus in a normal year, say 80% to 100% of the base?

 

I'm beginning FT at a MM in July, and from speaking with a couple of analysts there, they expect 1st years to be between $45-55k. They're expecting about 10-15% more as 2nd year analysts. It's not an elite boutique, but it's a fairly well-known MM bank.

 

yeah..centerview made way above 100k for 1st year. I can confrim that too. Not sure about qatalyst but I would not doubt it since Frank is literally grabbing market shares from GS and ms in the tech space

 

Yeah, I am not sure about triple digit bonuses, but a friend told me that 1st year top bucket made 85k. I still dont buy it though

PWB is another one that pays huge bonuses

 
jackofalltrades:
Most believable would be over $100k all-in; but if it's a $100k bonus, then good for them! just like the glory days of 2007...

Centerview paying $100k all-in is not even close. UBS paid ~$110k all-in this year.

Given that they pay well above street, I'm guessing ~$150k all-in for 1st years at Centerview.

 
copia22:
I heard Blue Horseshoe loves Anacott Steel.

I can confirm this...I heard it too.

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
 

He didn't say no-name, he said regional and well regarded. It could be 90-115, but I'd expect closer to the lower side of that. Also, you're interviewing for an internship, normally FT pay wouldn't come up. If this is your only option for an SA, I'd take it regardless of comp. If the comp ends up being shitty, leverage the internship for something better. It's their fault if they don't offer a comp package that convinces you to work for them. Of course, if they have friends in the business (which they probably do), burning them could bite you in the ass.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer "Your grammar made me wish I'd been aborted." -happypantsmcgee
 

It's not my only opportunity, the season is still early and I have other interviews, I spent my last summer at a MM and the reason that this appeared interesting is that they are strong in an area of interest for me. I just figured I'd head out to the interview as it would be nice to have the offer to leverage with the MMs I am applying at. Do you think that since it's in Boston comp will be lower?

 

Honestly I've got no clue, and without more information then you probably want to share in public, I highly doubt anyone here can give you a good answer.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer "Your grammar made me wish I'd been aborted." -happypantsmcgee
 

I was quoted 50-60 hours during my interview for a boutique (follow-up 2nd round interview is this Friday). Do you think he was just being nice and trying to sugarcoat the hours or does that seem legit? I almost would rather work more then that and just get paid more, but then again, it would be hard to complain about 50-60 @ 80-85k.

My name is Nicky, but you can call me Dre.
 

Yes Blackstone pays analysts the same bonus (because the analyst class is small, and because they don't want people putting in worthless facetime). I think it's usually slightly above the street's top bucket.

But yes I agree with the above posts that earning a few thousand dollars more or less as a first year is pretty trivial. Go for places like Greenhill or Blackstone because they have fantastic cultures, not because you want to make more than your friends.

 

Based on your discussions w/ boutique banks, will they hire someone as an experienced analyst/associate without previous banking experience?

I work in risk/valuation/analytics position at a respected Asset Management firm and have been looking for opportunities in investment banking recently, but the feedback I have gotten from these banks indicates that you'll be starting at the very bottom, in a class of fresh out of college analysts, if you don't have previous I-banking experience. Just curious what your feelings on this are based on your discussions w/ boutique banks and your background.

 

The answer to your question hinges on the organizational structure and culture of the boutique.

If you find boutiques with no set Analyst/Associate hierarchy, then you'll just be the most junior person.

If you apply to boutiques with a defined Associate and Analyst position, its obvious.

In my experience with speaking to boutiques, there is no "class of fresh out of college analysts" -- you're just the most junior person there. Depending on your fit with the team, they're either gonna be willing to take a chance on you and "train" you if needed, or they're going to move onto another candidate they think is a better fit (fit including a myriad of variables such as direct experience)

 

Sounds about right.

[quote]The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.[/quote]
 

Not standard at all. 5% of fees is fucking amazing, assuming of course that you actually close deals.

$50mm M&A deal at a blended average 2% fee is $1mm. Let's say it's a referral and 20% goes to wealth manager - down to $800K. 5% of that would net you $40K. Close two deals in a year and you are absolutely crushing it for an analyst.

Was the salary decent?

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 

What is the base?

I have heard of this 5% story before. If it's too good to be true, it is. How many deals does your firm close in a year? What kind of deals do they work on? Some small boutiques do capital raising (although they say they do M&A, ECM, DCM), who wants to do ECM, DCM or M&A with a boutique? Boutiques are always more expensive and some charge outrageous (retainers') fees. If they close 2 - 3 deals, and charge what 2 - 3% (yes, they are ****ing expensive!), the total transaction value is $50MN, that's 1MN before tax (to the firm, ignoring any admin expenses). 5% means you are getting what $50k on top of the base? No way, you won't be getting that.

That incentive structure sounds ridiculous to me.

Join a good boutique if you can. By that, I mean Lazard, Moelis, Evercore, Catalyst etc... I am sure you can get a list somewhere.

 
Best Response
j-phone:
who wants to do ECM, DCM or M&A with a boutique?

Lower middle market M&A at a boutique bank is what I do for a living, so I'll raise my hand on that one.

j-phone:
Boutiques are always more expensive and some charge outrageous (retainers') fees. If they close 2 - 3 deals, and charge what 2 - 3%

2-3% is pretty standard for a deal of that size. Anything lower and there is no profit on the transaction.

j-phone:

Join a good boutique if you can. By that, I mean Lazard, Moelis, Evercore, Catalyst etc... I am sure you can get a list somewhere.

No fucking shit. Jobs at Evercore don't grow on fucking trees.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 
j-phone:

What is the base? Some small boutiques do capital raising (although they say they do M&A, ECM, DCM), who wants to do ECM, DCM or M&A with a boutique? Boutiques are always more expensive and some charge outrageous (retainers') fees. If they close 2 - 3 deals, and charge what 2 - 3% (yes, they are ****ing expensive!)

Very few boutiques will use the term ECM/DCM as that implies access to public markets, which most boutiques do not have the distribution channel to access. The smallest boutiques are usually M&A only and are heavily skewed to sell-side. The next step up will also work on private placements (equity and debt). What do you mean by a boutique is always more expensive? Yes, they might charge more than a BB on a percentage basis, but it's an entirely different game because most BBs won't get out of bed for deals under a few hundred million in transaction size, and I can assure you that (at least when I was at a BB) we'd crank up the rate for deals at the bottom of our size threshold. It's not a head to head comparison. Think of it as economies of scale for transaction fees. When negotiating with a potential client IBs target to a specific deal fee amount for a transaction type versus some set percentage. Also, many companies put several banks through a bake off - if your fees are too far off market, you won't win. Retainer fees are credited to the deal fee, and they are done to ensure that the company has some skin in the game. Plenty of small companies will waffle and change their mind on what they want over the course of a deal process. The retainer is to give some downside protection against flaky company owners. We also used to charge a retainer at my BB, although that was many years ago so I have no idea if that's the standard now or the same for all groups.
 

Another thing to remember is the barrier to entry for advisory boutiques is low/non-existent, so you get many small boutiques doing capital raising projects for small private companies.

These companies, corporate finance boutiques or whatever you want to call them, come and go. They source deals in some way - maybe from their personal connections (from the past etc.) and start calling all the buy-side firms just to see if any funds are willing to put some money into it. If that marketing campaign is successful, they charge the outrageous fees. It costs zero to start these firms.

Some from these firms can't even do proper financial modelling. I am not talking about complicated equity transactions, but just a simple DCF. I met these people who are about to start a boutique firm. The founders had no experience in M&A, ECM or DCM, but they said, oh yeah, we know enough people in many industries and can do the marketing.

This is why it is important to join more established firms where you can get exposure to more things. Learn things in the right way first and then you can start discovering your own form. Just like sports.

 
j-phone:

Another thing to remember is the barrier to entry for advisory boutiques is low/non-existent, so you get many small boutiques doing capital raising projects for small private companies.

These companies, corporate finance boutiques or whatever you want to call them, come and go. They source deals in some way - maybe from their personal connections (from the past etc.) and start calling all the buy-side firms just to see if any funds are willing to put some money into it. If that marketing campaign is successful, they charge the outrageous fees. It costs zero to start these firms.

It costs way more than zero to maintain your broker dealer license. The boutique I worked for spent around $250k to $500k per year to maintain its BD license (cost varies depending on whether or not you were audited that year).

Selling securities (what is done when raising capital) is illegal without being a broker dealer. There are some shady boutiques that aren't licensed, but they are playing with fire. Smart companies will only work with banks that are FINRA/SIPC members.

 

Having worked at both a top BB and a small lower middle market boutique, I can attest that the level of modeling needed at the boutique was actually more sophisticated in terms of revenue and cost build ups. At BB you are unlikely to build true operating models.

 
WOBA:

Having worked at both a top BB and a small lower middle market boutique, I can attest that the level of modeling needed at the boutique was actually more sophisticated in terms of revenue and cost build ups. At BB you are unlikely to build true operating models.

I've also worked at both a BB and a small boutique, and this is accurate. Furthermore, many smaller companies only have quickbooks so there is a lot of research and effort needed to even get the data you'll need for the model.

 

I'd guess that they are talking about 5% of fees to the deal team, which would be after the firm's cut for overhead (often 1/3 of total fee) and possibly after the partner's cut (may also be up to another 1/3). Then the partner may also take a sourcing cut, the partner may share in the deal team split or there might be a referral fee as mentioned above (although 20% seems high - the boutique i worked for didn't take referrals from wealth managers, although we did regularly get them from the IB groups at a couple of BB's that didn't ask for anything - the deals were usually too small/too complicated relative to fees for them to waste time on, and they wanted to look like a good guy by referring to someone competent and willing to work at a lower fee).

My guess is that they are really telling you that it would be somewhere around 5% of the remaining 1/3, or

 
TechBanking:
although 20% seems high - the boutique i worked for didn't take referrals from wealth managers

Usually 10-20% depending on the bank, but was trying to be conservative. Places like UBS and MSSB have formal referral programs and the FA is compensated out of the referral fee (in addition to generally getting the new assets, which in the long run is probably a bigger windfall).

Agree with everything else you mentioned. At my office we generally look at it like we have $2mm of overhead to cover for the year, after that everything accrues to the bonus/partner pool (50/50 split) and you get paid off marginal fees. This is less of a steadfast rule for juniors who are more confined to a range. Our BD team gets paid a direct % of any deals that they source (not sure of the amount, but less than the 20% for external referrals).

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 

here is what goldsmith agio helms (nka Lazard Middle Market) did before they were acquired by Lazard

30% to partnership 25-35% to MD based on experience level/who sourced deal/etc. 15%-25% to VP/Director 7.5-10% to associate 3-5% to analyst any balance back to partnership

obviously bigger deals required 5 person teams (MD, Dir, VP, Ass, Ana) so %'s get cut

so if you worked on $3M of deals as an analyst you would get $3M*5%=$150k in total comp your base of $60-70k is backed out of total comp so your bonus was $80-90k one note is that there are caps, an analyst/associate cannot make $500k, just because he was staffed on random homerun deal, there are caps at lower levels

this was the framework and varied from deal to deal based on size, deal team, who sourced it, etc., but general framework of how they did it and how some M&A boutiques operate

 
Bluto:

Lazard is one of the best banks but why is compensation so low compared to its peers like Centerview and Evercore.

On that note do current employs know what a first year analyst can expect to make? And does pay vary by location?

Just quoting this so he / she doesn't realised how retarded he / she has been and edit it.
"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

For incoming analysts it is exactly the same. Don't know why people want to create misconceptions about specific matters. Lazard is one of the top M&A advisors in London and would see no reason to pay less than other banks, at least at the entry level.

 

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