NEW YORK (Reuters) – Fashionable on Wall Street: Small financial advisory firms.
Centerview Partners LLC, which was founded just two years ago, has jumped 20 spots to the No. 10 position worldwide in the closely watched investment bank rankings or “league tables,” according to Thomson Reuters data.
It advised on deals with a combined value of $187.9 billion through September 22 this year,
It is the only so-called boutique firm in the top 10 list, which is dominated by banks such as Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N) and Citigroup Inc (C.N).
Behind its astronomic climb are three Wall Street veterans, Blair Effron, a former UBS AG vice chairman; Stephen Crawford, a former Morgan Stanley co-president; and Robert Pruzan, a former chief executive of Dresdner Kleinwort Wasserstein North America.
“These are all people who have substantial client networks in place,” said William Wilhelm, a finance professor at University of Virginia’s McIntire School. “And that’s what really matters, it’s their connections and their talent.”
Centerview, which declined to comment for this story, was an adviser on some of this year’s major deals, including the $113 billion Philip Morris International (PM.N) spinoff by Altria Group Inc (MO.N) and InBev NV (INTB.BR) $52 billion deal to buy Anheuser-Busch (BUD.N).
But it has advised only on eight deals so far, often along with other banks, compared with the 270 worked on by Goldman Sachs, which took the No. 1 spot again.
“Centerview is committed to building broad relationships rather than being myopic about creating transactions,” said Liz Claiborne Inc (LIZ.N) Chief Executive William McComb, whose company is a client. “The team at Centerview has consistently given advice that goes beyond the art of deal making, offering recommendations and providing external perspective on virtually every element of our new strategy.”
The climb on the back of a few big deals could make Centerview’s league-table perch precarious, but the firm has built on its success. In U.S. M&A rankings, Centerview just had to jump three spots to the No. 10 place.
In one of its latest jobs, it will advise the New York State Insurance Department on terms of potential sales of American International Group Inc’s (AIG.N) regulated units.
Centerview has been adding other industry veterans to its ranks. James Kilts, who as Gillette’s chief executive sold that company to Procter & Gamble, co-founded the firm’s private- equity business.
Centerview and other smaller firms such as Lazard Ltd (LAZ.N), Greenhill & Co (GHL.N) and Evercore Partners Inc (EVR.N) do not engage in trading or lending but focus on advice, much like the way Wall Street’s big investment banks operated until the 1980s.
At a time when capital is scarce and Wall Street’s largest players are disappearing, these smaller firms are sitting pretty.
“We as a group have been vindicated by the disappearance of Bear Stearns and Lehman, and some of the other firms,” said Federico Mennella, a managing director at investment bank Lincoln International.
By Paritosh Bansal and Martinne Geller
(Editing by Jack Reerink)