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The Imarticus team felt quite proud this week as the Economic Times featured the country’s top 5 boutique investment banks and their journey so far. Reshma Krishnan, our IFAP program’s head faculty, is an alumnus of Avendus Capital which took center stage in the article.
It was during Reshma’s five year stint with the firm that she realized the need for professionally trained Investment Banking analysts to fulfill the needs of boutique firms like Avendus Capital, Mape and the host of boutique firms out there that cater to rising need of mid- market firms not catered to by bulge bracket investment banks.
Investment banking jobs in boutique firms are among the most sought after because unlike being an analyst in a bulge bracket firm, the boutique firm analyst is part of the entire deal, from origination to execution to closure, thereby gaining exposure to all crucial aspects of a transaction.
In bulge bracket firms, the analyst is predominantly involved in collateral preparation and hardly ever sees the client. But what do analysts do in an investment banking job in a boutique bank?
If you refer to our earlier post on the difference between the buy side and the sell side, you will understand the role the investment bank plays during a transaction. To summarize, a sell side transaction is where an investment bank represents the client who is selling an asset or raising funds by selling equity. A buy side is, as the name suggests, a client who wants to buy an asset or infuse equity, or buy a stake in a firm. Boutique firm clients can be corporate or private equity funds and many boutique firms specialize in mergers and acquisitions (M&A), and private equity (PE) fund raising for corporates.
In any M&A or PE sell side situation, this is the typical process:
Planning and Preparation
Goal – Gain clarity on business objectives and how they map to market realities
Key Deliverables – Clear definition of M&A criteria or fund raising requirements and valuation expectations
Analyst role – Read more in our earlier article
Marketing and Prospecting
Goal – Create deal possibilities by mapping the market, identifying a target universe and reaching out to prospects
Key Deliverables – Qualified list of targets that are interested in participating in M&A or PE Process
Analyst role – Meet client, acquire and analyze information, create Information Memorandum and other documents. Start help populating the Due Diligence room
Evaluation and Prospect Finalization
Goal – Create shortlist of candidates with whom we can close a deal if we converge on valuation and terms
Key Deliverables – Adequate number of buyers or sellers with whom a deal can be closed
Analyst Role – Identify potential partners and create and maintain buyer/funder tracking list
Goal – Make an offer or receive offers that balances out appropriate negotiation tactics and dynamics of the situation on the other side. Get multiple term sheets
Key Deliverables – Exclusivity with best available option
Analyst Role – Analyze data to help team negotiate the best offers; continue populating the DD room
Goal – Help co-ordinate due diligence, Assess all existing and potential risks with the business (financial, operational, etc.)
Key deliverable – Make sure Diligence goes smoothly and mitigate all risks
Analyst role – Co-ordinate Due Diligence
Goal – Document final commercial and legal terms and conditions through appropriate legal documents
Key Deliverables – Share Purchase Agreement, Disclosure Letter, Escrow Agreements, etc
Analyst Role – Arrange meetings, gather data to support negotiations
Goal – Coordinate closure of conditions precedent, flow of consideration and exchange of shares
Key Deliverables – Successfully closed transaction
Analyst Role – Be on ground resource to team
Our IFAP program equips analysts to handle all parts of the process from valuation, collateral preparation, to documentation.
This is why we are among the top preferred partners for boutique investment banks.