Los Angeles has emerged as a major financial center and home to some of the top investment banks in recent years. The entertainment, technology, healthcare, and real estate sectors have fueled strong economic growth, creating ample opportunities for investment banking activities. Major players like Goldman Sachs, Morgan Stanley, and Bank of America have ramped up operations to serve local corporations, startups, private equity firms, and high net worth individuals. They provide a full suite of services ranging from IPOs, M&A advisory, equity and debt financing to private wealth management.
Entertainment deals driving M&A activity
The entertainment industry centered in Hollywood has been a key driver of investment banking activity in LA. As studios, production houses, and streaming platforms engage in big mergers, acquisitions and capital raises, top investment banks have been involved in brokering mega deals. For instance, LionTree Advisors, a boutique bank, advised Fox in the $71 billion sale to Disney. PJT Partners was the buy-side advisor for AT&T on its $85 billion takeover of Time Warner.
Soaring startup funding catalyzing growth
The technology sector encompassing Silicon Beach startups has seen record levels of venture capital and private equity funding in recent years. Top investment banks have been providing IPO and fundraising advice to fast-growing tech unicorns. Many VC-backed startups also get acquired, often through deals led by banks. For example, Santa Monica-based Snap Inc went public in a $3.4 billion IPO in 2017 with Goldman Sachs and Morgan Stanley as lead underwriters.
Wealth management gaining traction
With the rise of the ultra high net worth population from Hollywood, investment banks are aggressively expanding their wealth management capabilities to serve wealthy individuals and families in LA. Merrill Lynch, Morgan Stanley, Goldman Sachs and other banks have been adding more financial advisors and portfolio managers to customize investment solutions for clients including celebrities, entertainers and studio executives needing specialized services like philanthropy advice, trust establishment, estate planning, art advisory and sports finance management.
Ongoing consolidation and outsized deals
Even amid the pandemic, M&A activity has continued at a brisk pace in 2020 and 2021. There have been several big transactions like AECOM’s $2.4 billion acquisition of WSP’s US advisory services business with Bank of America and Goldman Sachs as key advisors. Looking ahead, further consolidation is expected in engineering services, healthcare IT, pharma services and digital media on the back of LA’s economic expansion, translating into more business opportunities for top investment banks.
In summary, Los Angeles has developed into a prominent location for top investment banks on the back of strong economic fundamentals and large corporates. Leading banks are expanding aggressively to capture M&A, IPO and fundraising related deal flows across sectors like technology, media, healthcare and real estate. At the same time, private wealth management represents a sizeable opportunity to serve the investment banking requirements of wealthy individuals.