September 25, 2006
In 2001, when Douglas Brockway and a couple of partners formed Innovation Advisors, a New York-based advisory boutique focused on the technology industry, friends in the investment banking world were incredulous.
Back then, the US economy was in the doldrums and the technology industry was licking its wounds. But not quite five years later, Brockway and his firm have won a measure of respect from old colleagues.
"A lot of people scratched their heads and asked why we were starting an investment bank," says Brockway, a managing director at the firm with 15 years of experience dealing with emerging growth companies at SG Cowen and Alex. Brown. "Now those same people are saying, You're smart -- and a little lucky.'"
Indeed, what began as a three-person operation in New York that was long on energy and experience but short on actual business clients has morphed into a firm with Boston and Chicago offices and a staff of 18. Brockway, moreover, boasts that the upstart firm has closed 30 transactions since its inception, the bulk of them M&A deals. And Innovation Advisors is not alone.
Every profession that services mergers and acquisitions - lawyers, accountants, insurance firms -- have seen its fortunes rise of late. But few have benefited more handsomely than the 25 to 30 regional and boutique investment banks around the country that focus on advisory work and private equity investments in the middle market. Ironically, the explosion of opportunity, thanks in varying parts to pricing, generational changes and the ubiquitous private equity pressure, has caused these little fish to grow quickly and stretch the definition of boutique.
Time to Get In on the Auction
It's no surprise that the M&A boom, and concomitant private equity explosion, have been the primary drivers of this success. The effects these two engines have had on middle-market banks have caused them to mushroom.
The best... [continues]
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