Published on July 16, 2018 by Ankit Soni
We, at Acuity Knowledge Partners, have been partnering with global investment banking (IB) firms for over 15 years. During this period, we have had the opportunity to work closely with over 200 firms located across the Americas, the UK, Europe, and the APAC and MENA regions. This has given us some unique insights into strategies deployed by these firms through various stages of their growth curve.
If we are to look closely at the revenue generation drivers for an IB firm, it is primarily dependent on three factors:
Given that the percentage of deal fees (3) is mostly determined by the industry, geography, and competition, with limited control by the firm itself, the focus for any company trying to grow their advisory revenues should be on the other two determinants:
Number of senior personnel (MDs, EDs)
Productivity of senior personnel (time spent in client meetings vs. other non-productive tasks)
Strength of relationships
Meaningful insights and quality of advice delivered
(1) Number of pitches, which depend on
(2) Deal conversion rate, which depends on
Anyone who has ever run an investment bank would testify on how difficult it is to find good quality senior talent with deep industry networks. When someone of that caliber and experience does join a firm, they usually come with a steep price and long gestation period before producing any meaningful results. In light of this, it is in the interest of an IB firm to derive maximum value from existing senior personnel by maximizing their productive time.
All efforts need to be made to keep your senior team in front of clients as much as possible, and the entire origination process needs to be designed around this. Senior bankers’ time should be spent building good quality relationships, nurturing and maintaining a wide coverage network, and delivering deep meaningful insights and advice that sets them apart from the competition.
It is in these situations that a strong support team of analysts and associates can act as a force multiplier. Good and meaningful research and analysis with impactful presentation is something that is desired across regions and sectors, and any team capable of delivering this with limited senior level guidance can set their firm apart.
Having said that, finding good talent at a junior level and managing career aspirations is becoming increasingly difficult in a highly competitive landscape. This becomes even more complicated as team sizes grow above 15-20 members, and senior bankers inevitably get bogged down with team management activities, directly impacting their productivity.
In our long association with many of our clients, we have seen some very unique ways in which we have been able to provide bespoke solutions to maximize senior bankers’ productive time for our clients. These go beyond the scope of usual offshore support on tasks, such as company profiles, trading and transaction comps, and benchmarking.
Some of these examples include -
Low-cost entry into a new geography, product, or sector: Hire a senior specialist and leverage MA Knowledge Services as the offshore partner for junior support, eliminating the need for additional office space or building out a team
Building visibility as a Thought leader: Develop insightful content that can be shared with the target audience to increase visibility and credibility
Leveraging language/local knowledge base for cross border deals: Provide support for language skills and knowledge of a particular market to help support cross border deals (e.g., US – China or US – Europe)
Lead generation support through Salesforce/CRM management: Manage contacts, reach out, and perform cold mailing, and email marketing campaigns on behalf of senior bankers
Fly-in model: Pull in MA Knowledge Services personnel onshore to execute deals while origination activities can happen through offshore support
Research function consolidation and Market Database (MDS) rationalization: Consolidate research function with MA Knowledge Services and rationalize MDS subscription to help save costs and increase onshore productivity
Presentation layout and templates: Utilize MA Knowledge Services’ creative support for template standardization
Bespoke analysis to stand out from competition: Conduct bespoke analysis that can help a firm stand out in a crowded market (e.g., tracking actual warehouses using Google maps, profiling personnel before meeting them by tracking their movement, interviews, and thought process through publically available sources, etc.)
Increase productivity through BEAT implementation: Use our proprietary BEAT (Business Excellence and Automation Tools) solutions suite to increase productivity and efficiency of processes/workflow
Many of these solutions have evolved from extensive discussions and white boarding sessions, where we have taken the time to understand our client’s pain points and helped devise a win-win strategy.
Our experienced business development teams are present locally in most major financial centers, enabling us to spend a substantial amount of time with our clients, understanding their needs and customizing our solutions accordingly.
As we near two decades of providing investment banking solutions, we have evolved to be a thought partner for our clients, working with them to help overcome the numerous challenges they face today while building a new model powered by automation and bespoke solutions for tomorrow.
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About the Author
Assistant Director, IB
Ankit Soni has been with Acuity Knowledge Partners’ Investment Banking (IB) vertical for over three years. He is responsible for engagement management and business development activities for investment banking clients and has been involved in transitioning and building up IB teams for clients based in the US and Europe.
Previously, Ankit was based in London, where we worked with CDC as a part of their Asia Funds team. Prior to that, he worked in Nomura’s investment banking division. He has completed his MSc in Management from Imperial College Business School, London, and his Bachelor in Mechanical Engineering from Manipal Institute of Technology, India.
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