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Back to blog April 23, 2018 No Comments Author: Andy Jones

Investment Banker Density – by State

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.

For more junior bankers, it’s arguably best to start in locations with the highest absolute number of investment bankers. M&A hubs like New York City, Los Angeles, Chicago, Miami/Tampa and Dallas/Houston are undoubtedly the best places to learn investment banking trade skills because these locations provide exposure to large volumes of deal flow.

However, for seasoned bankers expanding through satellite offices, or for Managing Directors breaking off to start their own firm, there is perhaps greater opportunity in states with a lower saturation of investment bankers per GPD. From this perspective, a case could be made that Washington, Oregon and Ohio might be better locations to open a new investment bank (or satellite office) than Minnesota, Colorado or Georgia.

The Study

To identify the states with the most opportunity, we first looked at the absolute number of investment bankers per state. However, if we only look at the absolute numbers, it’s very similar to ranking the states by population:

States ranked by number of investment bankers:

  1. New York
  2. California
  3. Illinois
  4. Florida
  5. Texas

States ranked by population:

  1. California
  2. Texas
  3. New York
  4. Florida
  5. Illinois

…same states, slightly different order.

The study became more interesting when we normalized the number of investment bankers by the population and by the GDP of each state.

Investment Banker – Population Density

The chart below shows the number of investment bankers per million in state population. This is effectively the investment banker population density for each state.

Investment Bank Density by State

While New York still ranks at the top of the list, we can now see that Washington DC is surprisingly at the #2 position. Other surprises include Minnesota at #5 and Texas all the way down to #18.

Investment Banker – Economic Density

Normalizing the number of investment bankers by the Gross Domestic Product (GDP) for each state, shows the economic density of investment bankers. The chart below shows the number of investment bankers in each state per billion dollars in state GDP.

Investment Bank Economic Density by State

New York still ranks at the top, with the highest number of investment bankers relative to the state’s economic output. That is, it is the most competitive M&A market.

Other observations:

  • Texas, with a large economy, is a far less saturated market for investment banking per dollar of economic output.
  • Conversely, Minnesota, ranked at #4, shows a large number of investment bankers relative to the state’s economic output. That is, Minnesota and other higher ranked states are likely a much more competitive market for M&A participants.


Although most investment banks represent out-of-state clients, geographic proximity encourages business relationships. Especially for bankers operating in the middle market and the lower-middle market, having office locations in regions with lower I-banker density could represent an opportunity to serve under-represented markets while enjoying a less competitive landscape.

States with very low investment banker densities (those to the far right of the chart like Oklahoma, Hawaii and Idaho) might present the lowest competitive M&A landscapes, but might also lack sufficient economic size to generate adequate deal flow.


Note: For the investment bankers in this study, we only included corporate finance bankers involved in M&A with titles of Vice President and higher. Consequently, we excluded Sales & Trading, and Research activities and excluded more junior positions like Analysts and Associates. Also, I should note that New York data might be slightly understated because the data may not reflect the full count of bankers at the bulge bracket firms.

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