By Lauren Silva Laughlin
FORTUNE -- Potential clients of Ken Moelis's eponymous investment bank needn't look any further than the cover of the prospectus for the firm's initial public offering to see the limits of independent advisory firms. Moelis has chosen two very familiar -- and large -- institutions to run its IPO: Goldman Sachs (GS) and Morgan Stanley (MS).
To be sure, independent advisory firms have been taking merger business away from larger banks. According to Moelis's prospectus, 80% of the top 10 announced M&A deals and 75% of the top 20 announced M&A deals included independent advisors in 2013, up significantly from 2003, when 30% of both the top 10 and top 20 included independent advisors. It's hard to deny Moelis's success in luring bankers from top firms.
Part of the attraction is Moelis's independence -- or the idea that it doesn't have overlapping businesses that can make money from clients in several ways. In September, Moelis told Fortune, "The aberration isn't the boutique. The aberration is the belief that it could all be conducted more effectively under one roof. The world developed with advisory and investment banks and commercial banks separate for a reason. It was only a short time ago that everything was put together."
Bulge bracket bankers, though conflicted, like to point out that their advice is more well-rounded. Boutiques don't have their finger on the pulse of the capital markets, they say. For multifaceted deals, a larger bank will always need to be involved.
Moelis's choice of advisors gives some credence to the big banks' argument. He's built up his own capital markets group, but it doesn't seem to be enough to bring his own firm to the market. His own clients may want to take note.
Keefe Bruyette & Woods, a 50-year-old investment bank that survived 9/11 and a CEO scandal, is bought up after a tough year.
Correction: 11/6, 9:30 A.M.
FORTUNE -- Stifel Financial, a brokerage and investment firm based in St. Louis, will pay $575 million to buy KBW, a Wall Street firm that specializes in advising financial firms. The price, which translates to $17.50 a share for KBW (KBW), is less than 10% above MOREStephen Gandel, senior editor - Nov 5, 2012 2:08 PM ET
Why this boutique investment bank matters on Wall Street -- and beyond.
FORTUNE -- As big investment banks wrestle with tarnished reputations and accusations of conflicts of interest, the allure of Wall Street boutiques only grows. They offer advice -- nothing else -- and have none of the other operations, such as trading, that breed conflicts. One firm little known outside of financial circles, Centerview Partners, has become a key player. MOREShawn Tully, senior editor-at-large - Aug 27, 2012 5:00 AM ET
The financial industry is besieged by protestors. It's also facing a slow-growth world and a wave of new regulation. In order to flourish again, the big firms must first change in painful ways.
By Geoff Colvin, senior editor-at-large
FORTUNE -- The brighter side of financial cataclysm wasn't easy to see in late 2008 -- the crisis was at its most acute, and no one knew if Armageddon lay ahead -- but Barney MOREDec 12, 2011 5:00 AM ET
Behold an exciting new feature of the post-bailout era: the megabank that wanders the globe with the weapons of financial mass destruction strapped to its chest.
UBS (UBS), the giant Swiss bank that took $59 billion in bailout funds three years ago in addition to billions of dollars in conveniently cheap Fed loans, is chafing at the restrictions that terrified regulators there are imposing.
The government wants to avoid having its Godzilla-scale financial firms – MOREColin Barr - May 26, 2011 11:19 AM ET
Who says there's no wage growth in the United States?
Bankers at J.P. Morgan, the investment banking unit of JPMorgan Chase (JPM), are in line for a 34% raise this year, if the bank keeps paying at its torrid first-quarter clip.
The investment bank set aside $3.3 billion for compensating its 26,494 workers in the first quarter. That's equivalent to $124,330 for the quarter and projects to $497,320 for the year.
That compares MOREColin Barr - Apr 13, 2011 8:36 AM ET
Considering the routine abuses by Wall Street banks in underwriting IPOs, the GM offering is a real winner.
One of the great fears about the GM offering was that Wall Street would drastically underprice the shares, which is one of the investment banks' favorite practices. During the tech bubble, the shares of newcomers in networking, software and telecom routinely popped 200% to 300% at their debuts, handing the underwriters' prized clients MOREShawn Tully, senior editor-at-large - Nov 18, 2010 3:21 PM ET
Goldman Sachs claims it can still deliver big returns. But new post-crisis rules mean it can't operate the way it used to. The surprise: There may be hope for investors.
Over the past two years Goldman Sachs's once-exalted public image has been battered, its conduct pilloried by politicians and the press. In July the investment bank agreed to pay a humbling $550 million to settle Securities and Exchange Commission charges that MOREShawn Tully, senior editor-at-large - Nov 2, 2010 3:00 AM ET
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