Investment banking faces a shakeout and only large commercial players and boutiques offering outstanding service will survive and prosper, the head of emerging markets banking specialist Renaissance Group told Reuters.
Investment banks are undergoing wrenching change as weak financial markets force companies to pull back on raising capital and striking deals, cutting the flow of fee income that had formed the lifeblood of the business.
“The industry will end up with a barbell of a small number of these enormous, essentially commercial banks, which have investment banking operations,” said Stephen Jennings, chief executive of Russian group Renaissance.
“On the other end, you will have much smaller, more entrepreneurial, primarily private businesses, and the accent will be on relationships, reliability, high levels of service, entrepreneurialism, which harks back to an earlier era.
“The killing zone will be in the middle.”
Take an investment banker to lunch this week. Show that you care! – Lee Adler