THE SUPER-LEAGUE BREAKS AWAY
The future of the middle-sized US investment banks looks bleak.
They are falling behind the top seven houses, in terms of profits,
market share and innovation. Some are straining to catch up; some are
giving up the race, and becoming niche players; others are keeping up
the appearance of being full-service houses, while steadily losing
market share and their best investment bankers.
The concentration of power in the hands of the big boys is not new.
What is new is the acceleration. Last year, the top seven houses --
Salomon Brothers, First Boston, Goldman Sachs, Drexel Burnham, Merrill
Lynch, Morgan Stanley and Shearson Lehman -- had an 85% share of the
primary debt market. But their share of the same market in the first
quarter of 1986 was 91.5%, and the market itself was 50% larger than in
the corresponding period last year.
The concentration...
