Most investment banks work on the sell-side of a client engagement.

Why the Sell-Side?

The largest portion of compensation earned by an investment banker comes from the success fee. Consequently, bankers prefer to work on transactions with a high probability of closing. For reasons discussed below, sell-side engagements have a much higher probability of closing compared to buy-side engagements.

At www.PrivateEquityInfo.com, we track investment banking firms, their preferred sectors and their key executives. We also predominantly serve investment bankers as customers and correspond with them daily. Consequently, we have a good pulse on M&A deal flow and changes in industry dynamics. Over the past eight years or so, we have seen an industry trend reversal. Five to eight years ago, we noticed a general consolidation within investment banking as smaller firms moved under the umbrella of larger firms. However, in the last few years, we are seeing the opposite – the investment banking industry becoming more fragmented as newly-created firms launch and scale with the help of third-party services.

The trending private equity investment sectors for April 2018 are highlighted below with a few example transactions.

This morning, a customer asked how many private equity firms in the www.PrivateEquityInfo.com database have assets under management (AuM) greater than $1 billion. I thought I’d share the results of this quick study with everyone.

For at least 15 years, M&A professionals operating in the middle market have been expecting a huge boom in M&A deal activity as the baby boomers begin to retire. The generally accepted view is that there’s a huge bulge in the pipeline of potential deal activity just waiting to spew out.

But it seems that the baby boomers just aren’t retiring like the generation before them.

At Private Equity Info, we track the senior level executives at the various investment banks. I thought it might be interesting to look at the number of investment bankers per firm to gauge what an industry-wide “normal” middle market investment banking firm might look like.

We often get asked how to use our M&A Research Database to find private equity firms that invest in smaller deals. For example, companies with EBITDA in the $1 – $5 million range.

Because companies of this size are normally add-on investments to existing portfolio companies, the best method is to keyword search the portfolio company business descriptions to find those PE firms that already own similar companies. Watch our quick video demo on how to efficiently search portfolio companies to find the best fit for your company or client.

If you had to guess which states are most favored by private equity firms for investment purposes, you might not guess Colorado, Utah, Massachusetts, Texas and Vermont. But the data suggests that this is in fact the case.

States with a lower number of investment bankers per dollar of GDP may prove more lucrative for new firms or satellite offices.

In this study, we look at the quantity of investment bankers by state and compare that to the state population and the state GDP to arrive at the “density” of investment bankers by state.

The trending private equity investment sectors for March 2018 are highlighted below with a few example transactions.