Boutique investment banking has nothing to do with the world of fashion

People unfamiliar with the worlds of high finance, and investment banking in particular, could be forgiven for looking for some connection between boutique investment banking and the world of exclusive ladies fashions but they are going to be disappointed. The "boutique" in boutique investment banking comes to indicate the small size of the operation rather than suggesting any link with the fashion industry.

Boutique investment banking refers to small firms that provide investment banking services in contrast to the services offered by the large and famous investment banking houses. While the leading investment banking houses have thousands of employees, the boutique equivalent could even be a one man operation. Boutique banks, also known as boutique investment shops, work with many sectors of the economy but they have become particularly associated with hi-tech and Internet commerce companies.

The development of boutique investment banks is based on their ability to offer a more limited range of services than the major investment banks at competitive rates. Typically they focus on meeting the needs of small to medium size firms as is the case with the investment bank that advertises that its target clientele are enterprises with annual transactions of between twenty and three hundred million dollars per year.

Some of these banks specialize in giving financial advice on mergers and acquisitions, while others offer their expertise in raising capital for public and private companies. In addition to the price advantages that they can deliver by concentrating on delivering a more limited range of investment banking services, they also take pride in offering a more-client orientated approach combined with additional specialist knowledge in the needs of the sector they are servicing. 

Some clients have been deterred by the lack of personal attention they received from a major investment bank and been impressed by the more individual-orientated approach of the boutique investment bank manager. However, given the fact that the large investment banks are only interested in working with the larger companies, it is more accurate to view boutique banks as complementary to the larger banks rather than as competitors.

Some of the bankers involved in the boutique banking business see their businesses as eventually developing into full size investment banks while others see these smaller banking venture as more resilient that larger banks in economic downturns and they are pleased to continue operating on their present scale.