Boutiques: Independents’ day
Fixed-income markets stand at a crossroads. The traditional model is broken. A new breed of debt advisory and trading boutiques believe they hold the key to the future. Some of the biggest names in the bond market are jumping on the bandwagon. Alex Chambers examines whether this is the day of the independents.
BIG WAS BEAUTIFUL. It became the mantra and model for success in fixed-income investment banking for so many years that only the most experienced of the current breed of bankers can remember the days when boutiques were commonplace. But all that has changed. The comfort that clients and counterparties once enjoyed from operating alongside the equivalent of financial services supermarkets has turned to disquiet.
Some of the biggest names from those formerly dominant firms have seen the change and already positioned themselves to take advantage. Since the start of the year barely a week has gone by without the launch of a new debt advisory boutique, or an existing brokerage making a high-profile hire.
They see their potential in two main ways. First, while investment banks are struggling to deleverage their oversized balance sheets, investor and issuer client bases will remain neglected, and the capital markets dysfunctional. Independent advisers, without the conflicts of credit or other relationships, can help find capital when it is needed.