M&A Boutiques Are Relying More on Industry Track Record Than Superstar Bankers, Navatar Survey Finds

A recent Navatar poll of M&A advisors discovered that more than half of advisors consider the firm’s sector reputation and track record as the number one criterion for business development. In fact two out of three advisors agree that past performance and sector expertise trumps all other considerations, beating out other factors like the relationships of a superstar banker, cost or breadth of services.

The Navatar poll covered a cross-section of active advisors –including participants in our M&A industry webinars as well as Navatar clients discussing best practices – based worldwide (Americas, EMEA, APAC). In a pool of 150 or so registrants, respondents came from larger boutiques spanning multiple geographies as well as smaller local players.

The survey indicates that advisors are placing more effort on demonstrating strong industry background to their prospects. Newsletter campaigns have been gradually shifting from quarterly market updates focused primarily on financial figures to include more sector analysis and commentary. In fact, one respondent described their M&A business communicating less like an investment bank, and more like an industry “information broker” for prospects. Another forecasted “sub-vertical specialization” becoming the new norm. For instance, it’s no longer enough for a firm to specialize in healthcare, they have to be experts in pharmaceuticals.

Notably, the findings echo recent observations from prominent market players such as Solomon Edwards private equity head Brad McGowan, who in a recent interview with ACG predicted that deep sector expertise will be the new “key to beating the competition” and that clients will increasingly disfavor firms trying to be “all things to everyone.”

When it comes to track record, the poll suggests repeat performance is heavily dependent on operational excellence. Respondents emphasized the need for the right technology and standardized practices to ensure consistency in messaging as well as leveraging the right relationships. Individual bankers will always have their own way of doing things, but greater institutionalization at a firm-wide level allows them to better target their business development and buyer outreach.

On September 19^th, Navatar will discuss these trends and more as part of an upcoming virtual roundtable discussing the ways dealmakers now leverage their sector expertise for marketing and business development purposes.  Sign up by clicking here and see our other thought leadership on the latest M&A market trends by clicking here.