by Brian DeChesare Comments (269)

(Elite) Boutique vs. Middle-Market vs. Bulge-Bracket Banks: Got Rankings?

If there’s one thing I love, it’s ranking everything imaginable.

From schools to banks to restaurants, what’s the point of life unless you’re ranking everything and constantly comparing yourself to others?

Just kidding – it’s a massive waste of time.

Despite that, it is helpful to know about the different types of banks, especially since the categories have changed over time.

And, while it’s stupid to “rank the banks,” it is helpful to understand the trade-offs of working at different firms:

Warnings and Disclaimers

First, this article is not a ranking: It is just a classification of different banks.

As you’ll see, many of the groups “rank” at about the same level.

Second, do not judge yourself based on any online list or discussion, including this one.

Finally, before you freak out and start wondering why I did not mention your bank, realize that it is impossible to mention every bank in the world.

The examples here are representative, not comprehensive.

Categories of Banks

Here are the rough categories:

  • Bulge-Bracket Banks (BBs) – JP Morgan, Goldman Sachs, and Morgan Stanley; Bank of America Merrill Lynch, Citi, Barclays, Deutsche Bank, Credit Suisse, and UBS.
  • In-Between-a-Banks (IBABs) – Wells Fargo, RBC, and many European, Asian, and Canadian banks, such as HSBC, BNP Paribas, Mizuho, Nomura, BMO, and CITIC.
  • Elite Boutiques (EBs) – Evercore, Lazard, and Moelis; PJT Partners (formerly Blackstone), Centerview, Qatalyst, Greenhill, and Rothschild.

You could add a few others to this list, such as Allen & Co., Perella Weinberg, and Guggenheim, but there’s a lot of disagreement after “the top three” in this category.

  • Up-and-Coming Elite Boutiques (UCEBs) – LionTree Advisors, Zaoui & Co., Robey Warshaw, Lakeside Capital Advisers, Dyal Co, and M. Klein & Co.
  • Middle-Market Banks (MMs) – Jefferies, Houlihan Lokey, William Blair, Lincoln International, Oppenheimer, Cowen, JMP, Peter J. Solomon, Robert Baird, Piper Jaffray, Raymond James, Stifel, and Macquarie.

This list is also a bit controversial because there’s a thin line between “boutique” and “middle-market.” Also, I have no idea where Macquarie should go.

  • Industry-Specific Boutiques (ISBs) – Leerink (Healthcare), Cain (Healthcare), KBW (Financial Services), Ziegler (Healthcare, Education, Religion, etc.), Marlin & Associates (Technology), Financo (Consumer/Retail), FT Partners (Fintech), and hundreds of others.
  • Regional Boutique Banks (RBs) – Too many to list; if a bank operates in one location or smaller non-financial centers and works on very small deals, it’s in this category.
  • Other Banks (Merchant Banks, Hybrid Firms, and KPOs) – BDT Capital Partners, Tudor Pickering Holt & Co., Raine Group, Three Ocean Partners, and Lepe Partners.

Particularly in the “In-Between-a-Bank” (IBAB) category, I have left out many names because I don’t want to list 50+ banks.

So, please do not leave angry comments wondering why Société Générale, Crédit Agricole, or the other Big 5 Canadian banks are not there.

How Are All These Banks Different?

Size is the most obvious difference, but that’s not the best way to think about these categories: Many tiny firms end up working on mega-deals these days.

Instead, you can use these four criteria:

  • Deal Size: Does the bank work on deals worth less than $100 million USD? Or mostly deals below or above $1 billion?
  • Geography: Do they have a presence only in one city or region? Are they global? Are they strong in Europe but not North America or Asia?
  • Exit Opportunities: Where do bankers at this firm move to afterward? Are mega-fund PE exits common, or are middle-market funds, other banks, or normal companies more common?

There are some other differences as well – for example, you often earn more at elite boutiques than at bulge-bracket banks. But it’s easiest to start with the four criteria above.

Bulge-Bracket Banks (BBs)

These are the largest global banks that operate in all regions and offer all services – M&A, equity, debt, and others – to clients.

They also have sales & trading, research, wealth management, and all the other financial services you could imagine.

They tend to work on the largest deals, usually those above $1 billion USD in size, though they sometimes go lower than that depending on the market.

Over the past ten years (2006 – 2016), there has been a split in this group, with the “Top 3” (GS, MS, and JPM) performing better than the rest.

The European banks have also moved away from investment banking and toward wealth management and other businesses, which has hurt their prospects.

Some people even argue that firms like UBS shouldn’t be on this list anymore, but I’m not sure I would go that far (yet).

Analysts at the bulge-bracket banks get into private equity firms and hedge funds of all sizes, but they’re more likely to do so if they’re in non-ECM/DCM teams, such as strong industry groups, M&A, or Leveraged Finance.

In-Between-a-Banks (IBABs)

These firms are often strong in one specific product, such as debt, but don’t do as much business in other areas.

They also tend to work on smaller deals, overall, than the bulge brackets, but these deals are still bigger than what middle-market and boutique banks work on.

Wells Fargo is the classic example of the “In-Between-a-Bank”: Technically, it’s not a bulge bracket, but it’s also not a boutique or middle-market firm.

It’s strong in debt and ranks among the top banks there, but doesn’t do as much M&A advisory business (it’s around #20 on the global and U.S. lists currently).

Many of these firms also tend to be strong in one region, such as Europe for the French banks or Japan for the Japanese banks, but don’t do as well elsewhere.

You can win the traditional exit opportunities coming from these banks, but it’s safe to say that fewer Analysts get into the largest buy-side funds, and more tend to move to other banks, smaller funds, or normal companies.

Elite Boutiques (EBs)

These firms, with a few exceptions, focus on M&A Advisory and Restructuring rather than debt and equity, and they often work on the same deals that the bulge brackets advise on.

You’ll see at least one elite boutique on almost any huge M&A deal in the U.S. or Europe.

Despite that, these firms are still much smaller than the bulge brackets.

If a BB hires hundreds of new Analysts each year, an EB might hire only a few dozen.

Unlike true regional boutiques, the EBs have a presence in many regions, but often they are strongest in one place.

Rothschild, for example, is easily an elite boutique in Europe but isn’t quite as strong in the U.S.

Many Analysts from elite boutiques exit into the largest PE funds and hedge funds, and the success percentage tends to be high simply because there are fewer applicants.

However, there’s also a lot of variation in this category: Evercore, Lazard, and Moelis Analysts seem to place well, while there’s more uncertainty around some of the others.

Also, some of these firms place a heavy emphasis on internal promotions and keeping bankers “for life,” which makes exit opportunities tougher.

Up-and-Coming Elite Boutiques (UCEBs)

The main difference between UCEBs and EBs is that the UCEBs have much less of a track record.

They’re often founded by high-profile rainmakers at BBs or EBs, and they frequently work with their previous clients.

They’re even smaller than elite boutiques, they have less of a geographic presence, and they’re more dependent on a key individual(s).

Sometimes these firms fizzle out, but they can also keep growing and eventually become true elite boutiques.

Exit opportunities are unclear because of the lack of data. It seems possible to win traditional PE/HF roles, but the probability is lower.

Middle-Market Banks (MMs)

Similar to the bulge-bracket banks, middle-market banks also offer a variety of services and have a wide geographical presence, but they work on smaller deals.

Most deals are below $1 billion, though this varies a bit by the bank; some, such as Jefferies, tend to work on larger deals than the other MM banks.

You can exit to private equity firms and hedge funds coming from these firms, but it’s more difficult because Analysts at the BBs, IBABs, and EBs tend to get priority.

Also, the buy-side recruiting process at mid-sized-to-large-funds moves insanely quickly, and it’s tough to get “plugged in” if you’re at a smaller bank.

So, the most likely exit opportunities from here are:

Industry-Specific Boutique Banks (ISBs)

As the name suggests, these firms focus on one specific industry, such as healthcare or FIG, and often on M&A advisory deals within that industry.

These firms have a smaller geographical footprint than the others above, and they work on smaller deals than the BBs, IBABs, and EBs.

Deals are often comparable in size to the ones that MM banks work on, but that varies widely based on the reputation of the boutique.

As one specific example, Leerink, a top healthcare boutique, has mostly worked on equity and M&A deals for less than $500 million USD, with a few larger M&A deals.

That is more like “upper-middle-market” territory.

It’s tougher to win traditional exit opportunities from these banks, as they tend to favor internal promotions and keeping Analysts and Associates around for the long term.

Regional Boutique Banks (RBs)

Finally, these firms are very small and tend to operate in only one city, or perhaps a few cities outside of major financial centers.

They don’t necessarily focus on one industry, but they often focus on a small set of industries; they also tend to do mostly M&A deals and private placements.

Deal sizes vary, but many of these firms work on deals worth less than $50 million USD, and sometimes ones worth less than $20-30 million.

Exit opportunities are tough if you’re at one of these banks, and advancement is also tricky because there’s often no room to advance.

I haven’t seen firsthand examples of Analysts from these firms moving directly into private equity or hedge funds, but it’s possible, in theory.

The most likely exits are larger banks, Big 4 firms, or finance roles at normal companies.

Other Banks

Finally, there are other categories of banks.

Merchant banks, for example, operate as combined private equity firms and investment banks, offering advisory services and also investing in companies.

These firms are more common in emerging markets where people care less about conflicts of interest.

In India, “knowledge process outsourcing,” or KPO, firms do similar work for many banks.

They’ll create pitch books, crunch numbers, and do other tasks that the global banks prefer to outsource.

There are also hybrid firms that do a combination of consulting and investment banking, especially in areas like Restructuring.

If you want to work at a large bank or win a traditional exit opportunity, you’re better off going to a real investment bank than one of these firms.

There are some exceptions to that rule, but mostly in specialized fields (e.g., turnaround consulting can lead to Restructuring roles at elite boutiques).

So, Which Bank Should You Work At?

That’s completely the wrong question.

You should be asking which banks you have a realistic chance of working at.

For example, if you just graduated, you earned a 3.2 GPA (or a 2:2 with low A-Levels in the U.K.), and you only became interested in investment banking last month, you are not going to win offers at bulge brackets, elite boutiques, or middle-market firms.

You’ll have to target regional boutiques or small PE firms that might be open to off-cycle interns.

Or, maybe you skip banking altogether and go for independent valuation firms, Big 4 firms, or related roles.

On the other hand, if you’re at Princeton, you have a 4.0 GPA, and you’ve done two previous boutique IB internships, then you have a good chance at everything above.

If you have the option to do so, it’s almost always best to work at an elite boutique or bulge bracket because you get the best deal experience and exit opportunities.

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Working at an IBAB is also a solid option, and even MM banks are fine if you win offers there.

You have to be careful with Up-and-Coming Elite Boutiques (UCEBs); I’m not sure I would recommend them over the others unless you’re certain you want to stay in IB long term.

Similarly, you have to be careful with Industry-Specific Boutiques (ISBs) and Regional Boutiques (RBs) if your main motivation is the exit opportunity.

In particular, I’ve seen a lot of students suffer after joining RBs because the role often changes, deal flow dries up, or their compensation is cut.

If you have competitive offers from both a bulge bracket and an elite boutique, here’s how you can make a decision:

  • How certain are you that you want to stay in the finance industry for the long term?
  • Very Certain – It’s more of a toss-up, so you have to be more specific:
  • You Want to Stay in IB for the Long Term – It’s almost always better to take the EB offer because you’ll earn higher compensation and get more interesting work.
  • You Want to Move into Private Equity or Hedge Funds ASAP – It depends on your specific group. An M&A offer at an EB easily beats an ECM offer at a BB, but if you’re deciding between two strong industry groups, make a decision based on the people.

After running this site for almost ten years, my opinion is that most people don’t know what they want to do.

Especially in the last few years, I’ve seen a lot of students plan to go to mega-funds, but then get burned out after six months in IB and quit to join tech companies instead.

The Bottom Line: Even though elite boutiques do offer many advantages over bulge brackets, you’re still better off going to a BB unless you’re very, very certain of your long-term plans.

For example, if you’ve done four off-cycle and summer internships at banks of different sizes and concluded that IB is your passion, sure, accept the EB offer.

But if you’ve only done one 3-month summer internship, and you have EB and BB offers, you take less of a chance by going to the bulge bracket.

Got Rankings?

Most people spend far too much time “ranking” banks and not enough time thinking about where they have a realistic chance of working – or what their long-term plans are.

It’s good to know how the banks differ, but it’s even better to know what fits in best with your plans and what the opportunities from each bank look like.

Do that, and you’ll quickly realize the silliness of rankings.

As soon as you finish your current list, that is.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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Comments

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  1. Hi Brian,

    I’m an upcoming senior at a very non target school with a 3.3 GPA. I’ve has internships in PE, PWM, Business Development and sales, but can’t seem to find my break into IB. I have few connections at BBs, MMs and RBs but have all turned up fruitless.

    I completely understand my GPA is very subpar and being from a non target doesn’t help my case. What recommendations do you have?

    My personal idea was to work in Business Development, get an MBA and land a role somewhere. What are your thoughts?

    Thanks

    1. A GPA in that range at a non-target school will make it very difficult to win IB roles. My recommendation would be to find a related role at a Big 4 firm, an independent valuation firm, or something like that, and then try to make a lateral move into investment banking. Planning for an MBA is premature since you might not need it to get in, and business development isn’t the most helpful field if your goal is a lateral move into IB (since it’s all sales – applicable at the senior levels but not the junior ones).

  2. How do the Big4 firm mid-market M&A arms place among the banks?

    1. Worse than most of the banks in this list. It’s pretty rare to go from Big 4 middle-market M&A into private equity, for example (with obvious exceptions for some regions, teams, etc.). The most likely exits are moving to an investment bank or joining the corporate finance/strategy/related team at a normal company.

  3. Parker Coughlin

    Hi Brian, any view on a top BB M&A group vs an elite boutique at the mid levels (VP)? In terms of 1) getting promoted to MD and 2) marketability to other banks/corporate in the future?

    1. Elite boutiques are probably better for promotions and general work/culture. But bulge brackets are still better if you want to pursue other corporate roles outside of banking in the future. Everyone knows Goldman Sachs, JP Morgan, etc., but no one outside the finance industry really knows Moelis, Lazard, and the other EBs.

  4. Hi Brian, I am an incoming summer analyst in the M&A group of one of the non-big 3 BBs that has been struggling a bit recently. I am considering a post-summer lateral move to either an elite boutique or one of the “big 3,” but I’m not sure if it’s worth it, especially since full-time recruiting is so much harder than internship recruiting. What would you suggest?

    1. It’s probably not worth it unless you have really good contacts at the top 3 BBs. It takes a lot of effort to switch to another bank (https://www.mergersandinquisitions.com/investment-banking-accelerated-interviews/), and it’s not necessarily worth it unless you’re laser-focused on mega-fund PE.

  5. Hi Brian,

    What type of bank should I aim for if im a econ major transfer with a 3.8 attending a non target UC in southern California?

    1. Probably boutique and middle-market firms unless you have an amazing connection(s) at the largest banks. Your GPA is fine, but being a transfer student and attending a non-target UC make it tough, especially with hyper-accelerated recruiting these days.

  6. Anonymous

    Hi Brian,

    This upcoming summer I will be working at a BB IB group after interning at this same bank for the past two summers. I was recently placed in a niche group (e.g. FIG/RE) but was hoping to work in a more general group as I am interested in working at a private equity firm, with a strong interest in eventually focusing on healthcare. Although I do like the industry, I am not 100% sure I would want to pursue it long-term and it seems that all of the current analysts are accepting buy-side associate positions in this same industry. My question is if it would be better to after this summer try and lateral to a different group for full time (which would be tricky because of the politics) or try to recruit during the summer to another BB HC team or an EB M&A team. I don’t think that this process would be terribly difficult as I attend a top target and will have 3 good internships on my resume. However, I wonder if leaving the firm after 3 summers would be a waste of building that social capital so far or if summers are just summers and I should not consider my history with the firm as anything. Thoughts? Thank you so much in advance.

    1. If you want to move to a different group and cannot reasonably transfer at your firm, then yes, you should interview around and try to join another team via accelerated recruiting. Turnover is so high at most banks that staying there for the long term doesn’t matter much.

  7. Hey Brian,

    What happened to the legend of ubs la article? When you click on it under search it comes to this.

    1. We deleted it. We are deleting 80-90% of the content on the site (200 articles are already gone) because a lot of it is out of date or not that useful, and the UBS LA article fell into that category. It’s a massive amount of work to maintain and update ~700 articles, and it’s not something I am interested in doing anymore.

  8. Anonymous

    Hey Brian,

    My goal is to end up in MM PE (Bridgepoint, PAI, Equistone, Permira, etc.). Although I would not say no to KKR and Carlyle ;)

    I already have an IB internship experience from an IBAB (think ING) and will soon start an internship in a reputable MM IB (think Baird), with a possibility to get a full time offer later.

    Anyway, my question is: Is it better to take a full time offer from the MM IB, or does it make sense to do another internship at a BB/EB?

    In the city where I am now, getting an internship at Lazard, Jefferies, BAML, and DB would not be hard at all after having the IBAB and MM IB internships. The only thing is that I will have near 0% chances of being able to get a full time offer back form these EB/BB as their offices is very small and they are not looking for full time hires (maybe it’ll change tho). But the MM IB in which I will soon intern at is looking for full time analysts.

    What would you do if you were in my shoes? Take the full time IB MM and then try to lateral? Or take the EB/BB internship right after the IB MM internship and see where it goes from there?

    Thanks in advance

    1. There is no point in taking an EB/BB internship offer and delaying your full-time start date if the EB/BB internship will not lead to a full-time offer. So, take the middle-market offer and lateral to a bigger bank if necessary.

      1. Thanks for that Bryan,
        Another quick question, although not directly related to the content of the article:
        Again, considering the fact that I want to end up in a MM private equity (Bridgepoint) in 2-4 years. Is it better to be and start in a MM IB or an MBB (like Bain)? Which will have better chances in me landing the MM PE job?
        Thanks!

        1. I would still say a bank is better because it’s very tough to get into PE from consulting, even MBB, unless you target more specialized/operationally focused firms.

  9. Brian – great article!

    What about a regional bank (B. Riley financial). Can you lateral to a BB or MM as a VP after being a VP there?

    1. Yes, but they probably won’t give you “full credit” for your experience, so you might come in at a lower level.

  10. QuestioningMeaning

    Hi Brian,

    Great article and great site! I’m curious to hear your opinion on MBA BB Fellowship programs.

    I’m leaving the public sector (7 years in financial management and already hold a masters in public policy) to go private and get an MBA. I’m learning about certain BB bank programs that offer tuition stipends, guaranteed summer and full time associate level offers if you commit early.

    As someone looking for international exposure, I’m particularly drawn to the Credit Suisse MBA Fellowship- do you have any thoughts on this program or others?

    I know I want to do IB for 2-3 years and then hopefully pivot into PE or VC and it seems like too great an opportunity to sneeze at minus the commitment which I believe is a minimum of 2 years. Also as an older FT MBA the idea of some level of job security with a BB going into the program would seem to offer me the opportunity to learn and network more- but perhaps I’m naive and it will lock me into something I’ll have a hard time getting out of.

    1. Sorry, don’t know enough about it to say. However, at the MBA level it is extremely difficult to move into PE/VC because you have to network on your own and cannot rely on recruiters or a set process to the same degree. So if that is your main goal, you may want to reassess why you want to go into IB because it is not a terribly likely outcome.

  11. Hi Brian,

    A little unrelated to the question, but I recently got a FT offer from a BB, and the signing bonus was only $5000. When I asked HR about it, they said the industry average of $10k was only available to their returning interns, and since I was a full time hire, I was only eligible for half of that.

    Have you ever heard of this/is this normal? And if not, should I try to negotiate with HR to get the full signing bonus? I feel like they’re only doing this because it’s so late in the process and it seems like I don’t have any other offers.

    1. I have never heard of that. It sounds strange to me, but you don’t necessarily want to “negotiate” this because they could take it the wrong way and rescind your offer. $5K is small relative to your base salary + bonus, so it’s probably not worth the effort.

  12. Do you still consider Wells Fargo as an IBAB or a BB? Differing opinions here but would love to hear yours.

    Do you think it’s worth the lateral move from Wells to a top BB? (Tech)

    1. Yes, I do (this article was written about a year ago, so not much has changed).

      The usefulness of a lateral move depends on how badly you want to work at a mega-fund. If it’s your top goal in life, yes, a lateral move is worth it. If you don’t care, or you’d be fine with middle-market or upper-middle-market funds, then a move is not worth it.

  13. Thoughts on Guggenheim vs JPM in Media and Comms team for MBA Summer Associate Position

    1. JPM is the clear winner, especially if you ever want to move outside the finance industry.

  14. Anonymous

    What do you think my chances are of landing an analyst internship at an elite boutique in the US with a 2:1 (second class honours/ 3.5-3.8 GPA) with some extracurriculars? I’ve interned at a big 4 firm last summer if that helps..problem is that I don’t know if I’ll get an interview without any networking over there. Would really appreciate any advice!!

    1. It’s very tough to make that type of move without networking in the US, being on the ground there via a study abroad program, or something similar. You’ll have to do some networking at the bare minimum to have a shot – the Big 4 internship will help a bit, but you’ll be up against people who have already had previous IB/PE internships. So it’s not necessarily a great idea unless you have a burning desire to work in a different country.

  15. Hey Brian,
    I would love to hear your advice on something.
    Before that, let me tell you that my goal is to end up at a MM PE, with AUM of more than 1B preferably).
    I have now 2 internship IB offers in continental Europe, both could potentially turn to full time offers.
    One offer from an In-Between-a-Banks (think ING, ABN, SocGen) and another from a very respected MM M&A boutique (think Baird, William Blair, HL).
    I would like to know which one of these two will eventually bring me higher probabilities of landing at a MM PE after 2-3 years at IB? and why?

    Thanks in advance!

    1. Not that much of a difference, but the M&A boutique is probably better because the work will be more relevant.

      1. Thanks for the fast reply!

        Last thing; Considering the fact that I want to end up at MM PE (think Bridgepoint), do you think it is better for me to lateral to a BB/EB (JPM, BofA, Lazard, Jefferies) after 1-2 years at the IBAB/MM boutique? If yes, then what are my chances of actually doing so? And how will your answer differ if I want to stay in Europe compared to if I want to move to the US, and/or Asia?

        1. Yes, probably. Your chances depend entirely on your deal experience and how much you network to make the move. The answer doesn’t change based on the region.

  16. Any thoughts on Keybank IBD? Reputation, exit opportunities etc.

    1. I do not know enough to have a strong view. I believe they’re strong in financial sponsors / healthcare / real estate, but they’re still squarely in the “middle-market” category. So, good options for smaller buy-side firms, corporate development roles, etc., but not the place to be if you want to work at the mega-funds.

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