Investment banks are not created equal. Some of them provide services that others don’t and some are much smaller than others. Here are the different types of investment banks.
Regional Boutique Banks
Regional boutique banks are the smallest of all kinds of investment banks, both in firm size and typical deal size. Regional boutiques normally have no more than a handful to a few dozen employees. Due to their size, most regional boutiques do not offer all the services provided by bulge bracket investment banks, and may simply specialize in a single area, like handling mergers and acquisitions in a specific sector.
The offices and operations of these banks are limited to a specific region or city. Their clients may include major corporations headquartered in their areas, though they commonly serve smaller firms and organizations. Mostly, regional boutique banks are not involved with any government work other than on a local or state basis.
Elite Boutique Bank
Elite boutique investment banks are typically altogether different from regional boutiques. Elite boutiques are more similar to bulge bracket banks when it comes to dollar value of the deals that they manage. Such deals are usually over $1 billion, but they also sometimes handle smaller deals.
Elite boutiques also have sizable nationwide and international presence, operating dozens of offices in several countries. On the other hand, they usually don’t have the kind of global presence of a major investment bank.
Meanwhile, elite boutiques are similar to regional boutiques in that they typically do not offer all kinds of services that bulge bracket banks offer. They also sometimes limit their operations to managing M&A services.
Middle-Market Banks
As the name suggests, these banks occupy the middle ground between smaller regional investment banking firms and the big bulge bracket investment banks. Middle-market banks typically manage deals on the regional level and go up near the bulge bracket territory, usually ranging from about $50 million up to around $500 million or more.
Middle-market banks also have a much larger geographical presence than regional boutique, although not as big as the multinational reach of bulge bracket banks.
Unlike boutique banks, middle-market ones normally provides the full range of investment banking services as bulge bracket banks, such as equity capital market and debt capital market services, full financing and asset management services, and M&A and restructuring deals. Meanwhile, they may be similar to regional banks in that they may specialize in offering services to a particular industry or sector.
Bulge Bracket Banks
The bulge bracket banks are the major, international investment banking firms with easily recognizable names like Deutsche Bank, Morgan Stanley, Bank of America, Goldman Sachs, and Credit Suisse. These bulge bracket banks are the biggest in terms of handling the biggest deals and the biggest corporate clients. Their offices and employees run along the same amount as deals and clients.
Each of the bulge bracket banks runs internationally and has a large global and domestic presence. The major investment banks offer their clients with a full range of investment banking services, like trading, all types of financing, asset management services, equity research and issuance, and M&A services.
Most of these banks have commercial and retail banking divisions, generating extra revenue by cross-selling financial products.
