The Great Escape

The chaps over at McQueen, an advisory boutique set up by a bunch of former HSBC bankers, have been bought by American rivals Houlihan Lokey.

I always worry when I see one of the City's boutique corporate finance firms sell to a US predator Why? Because it could be a sign that a bull market is somewhere near its peak.

Mergers & acquisition bankers sell/pride themselves in being "experts" in telling companies when they should sell themselves, so you would have thought they would pick the best time in the market to sell their own business to a rival.

And in case you don't recall, in the months before the financial crisis and the bear market of 2008/9 several well-established boutique corporate finance shops sold out to the American banks. Jefferies, for example, snapped up LongAcre Partners, the specialist media/digital advisory boutique, for about £40 million in May 2007 - just before the beginning of the credit crisis struck.

Great timing by Johnny Goodwin, the founder of LongAcre, but perhaps not so great for Jefferies, which pretty much had to write off the deal off a few years later.

Still, some of these types of deals have worked out well for both sides, such as Evercore's acquisition of Lexicon Partners in 2011.

However, I noticed another top of the market indicator today: when bulge bracket investment bankers leave their financial institutions to set up their own boutique advisory firms. There have been plenty of those recently, the latest being Jerry del Messier's establishment of Copper Street Capital, which is based in, er, Maidenhead.

Here is a link to Gideon Spanier's diary item in the The Times on the launch by the former Barclays Capital rainmaker:

http://www.thetimes.co.uk/tto/business/columnists/citypeople/article4504610.ece