The best investment banking groups have traditionally been the bulge bracket banks like Goldman Sachs, Morgan Stanley and JP Morgan. However, in recent years, elite boutique investment banks like Centerview Partners and Evercore have risen to prominence, even surpassing the bulge brackets in terms of rankings and performance. This article analyzes the strengths of the top investment banking groups across factors like deal flow, compensation, work-life balance and exit opportunities.
Centerview Partners and Evercore lead in investment bank rankings
According to the latest 2021 Vault survey of over 3,300 banking professionals, Centerview Partners ranks #1 overall amongst investment banks. Evercore also places very highly at #2. The strength of these elite boutique banks comes from having the best work-life balance, employee relations, training and exit opportunities. They even surpass bulge brackets in compensation, with average salaries at firms like Evercore exceeding $750,000. On the other hand, Goldman Sachs has shockingly fallen to #19 in the 2021 rankings, with only Morgan Stanley (#4) and Bank of America (#6) cracking the top 10 amongst bulge brackets.
Technology and healthcare are top investment banking sectors
Within investment banking groups, the technology (TMT) and healthcare sectors are the most sought after currently. Top boutiques like Qatalyst Partners specialize in advising tech companies, with a track record of delivering great shareholder value on marquee M&A deals like Microsoft’s acquisition of Nuance Communications. Bulge bracket banks like Goldman Sachs also have leading TMT franchises built over many years of assisting tech IPOs and mergers. Meanwhile, healthcare is a rapidly growing sector with massive financing needs, although the learning curve is very steep.
Real estate and industrials provide stability
Although groups like TMT and healthcare present exciting opportunities, they can also experience significant volatility depending on economic cycles and market downturns. In contrast, sectors like real estate and industrials tend to be more stable in their deal flows. Within real estate, there is activity across REITs, home builders, gaming and lodging companies. Valuation methods also tend to be more tangible here relative to sectors like technology. Therefore, real estate and industrials investment banking groups could present better long term career prospects for junior bankers.
Boutiques offer better work-life balance
While higher compensation often comes with a price, investment bankers at elite boutiques seem to defy the odds by delivering both top pay and lifestyle. The average hours worked per week is 80 at a firm like Qatalyst, but even this is considered low by industry standards. Bulge brackets average around 73 hours per week, with first year analysts often breaching over 80-85 hours. However, senior bankers generally have better work-life balance across both boutiques and bulge brackets. Therefore, the promise of higher long term quality of life is a key factor attracting top talent towards boutiques.
In summary, Centerview Partners, Evercore and technology focused boutiques like Qatalyst Partners currently lead the investment banking industry in terms of prestige and performance. However, bulge brackets like Morgan Stanley still present good career opportunities through their scale and diversification across sectors. Within sectors, technology and healthcare dealmaking is red hot now but also highly complex and volatile. Meanwhile real estate and industrials offer better stability and tangible valuation methods. Overall though, elite boutiques seem to offer the best compensation and work-life balance, making them highly attractive destinations for aspiring bankers.