Every now and again, a story appears that makes you realize that you've been trapped on the merry-go-round for way too long. The story in question appears Thursday in the Wall Street Journal, which quite properly examines the resurgence of "boutique" investment banks against "bulge bracket firms." (Both terms lack a certain precision, which no one seems eager to provide them; the notion of a "bulge bracket" is particularly dubious historically. But never mind, like the loose use of the word "bank," they've both become popular and ubiquitous.) The story is pegged to strong fourth-quarter earnings from predominately advisory shops like Lazard, Evercore and Greenhill & Co. These firms showed strong growth in advisory revenues, the paper reported, versus declines at the big boys, like J.P. Morgan Chase & Co., Bank of America Corp. and Citigroup Inc. Morgan Stanley was flat and that eternal outlier, Goldman, Sachs & Co., saw 9% growth, which given its market share, is a whopping increase.
Whether these numbers really justify the thesis of the story -- that they "highlight how the boutiques are slowly draining talent and business from Wall Street's behemoths, the so-called [ah, now it's someone else's fault] bulge-bracket firms" -- is really anyone's guess. After all, the quote the paper lines up to support that conclusion comes from Greenhill's chief executive Scott Bok, who is not only talking up his own book but who seems to be carefully describing market share gains over "the past year or so," not some fundamental talent shift.
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