But senior executives are pitching in, too. Some banks are positioning the middle market as a way for younger bankers to prove themselves. “There’s none of that ‘flyover state’ mentality you sometimes get from New York bankers,” Mr. Aasem Khalil, a Goldman partner who relocated there in 2017, has visited CSW’s offices three times in the past year, Mr. Joe Armes, chief executive of CSW Industrials Inc., an $870 million maker of industrial sealants and lubricants, said he hears monthly from Andy Rabin, JPMorgan’s point man in Dallas. “‘But you will be on the front page of the transaction summary that Jamie gets on Friday mornings.’” “I tell my team, ‘You’re probably not going to be on the front page of The Wall Street Journal,’” Mr. JPMorgan said it has doubled the investment-banking fees it collects from those commercial-banking clients, from $1.3 billion in 2010 to $2.5 billion last year. Today the group includes 60 bankers across seven offices, working for Atlanta native John Richert. Investment bankers started pitching their services to the thousands of midsize companies that already used JPMorgan’s commercial bank to manage their day-to-day finances. JPMorgan in 2012 created a new group to focus on regional deal making. “There are lots and lots of companies that have enterprise values of $500 million to $3 billion that have just never been addressed by Goldman Sachs,” Chief Executive David Solomon said earlier this year. Goldman dispatched four partners to regional offices in Dallas, Seattle, Atlanta and Toronto and assigned a dedicated banker to hundreds of what it calls “lonely clients,” which get little attention from New York bankers. A spokeswoman said that group’s revenue rose 25% from 2017 to 2018. Goldman in 2016 created a 30-banker team to focus on private-equity deals, part of a broader effort to add 1,000 new corporate clients to its roster of about 8,000. There are 7,800 companies owned by private-equity firms, up 65% since 2010, according to the Milken Institute.īanks also have their eyes on the $1 trillion in dry powder private-equity firms have to spend. Sleepy family-owned firms have been replaced by sponsor-backed companies eager to borrow, do deals and go public.
Deals also close faster and require fewer staff than complex, trans-Atlantic takeovers.Īn explosion in private equity also has brought order and sophistication to the middle market. While fees in the middle market are smaller, they are typically split between fewer banks. last year valued at over $2 billion, versus 2,200 under, according to FactSet. Their own investors are demanding growth, and “there are only so many big transactions,” Mr. “As soon as there’s a down cycle, they disappear.”īank executives say they are committed this time. “Every 10 years or so, the big banks get the idea to move in,” said Mark Brady, head of mergers and acquisitions at William Blair & Co., a Chicago-based firm where the average deal is $400 million. in Richmond, Va., and Minneapolis’s Piper Jaffray Co s. Deals between $500 million and a few billion dollars historically have been dominated by regional firms such as Harris Williams & Co. “We didn’t.”Īs the postcrisis deal boom shows signs of slowing, Wall Street firms accustomed to headline-grabbing megadeals are sliding downmarket. “You worry as a CEO of a smaller company that you’ll get the B team” from a big bank, said Ms. Bank of America Corp. has doubled its investment bankers in regional offices over the past two years.Īnd JPMorgan beat out four other banks to represent Cianna, which sold for $200 million to Merit Medical Systems Inc.
Citigroup Inc. sent a chairman to pitch for a $140 million tech deal. GS 1.70% partner cold-called his way onto a $162 million stock-offering deal for a Texas-based chemicals company. They are hiring bankers in cities like Dallas and Atlanta and cozying up to a different set of corporate executives.Ī Goldman Sachs Group Inc. Investment bankers across Wall Street are tripping over themselves, and sometimes each other, to win business advising smaller companies on deals-assignments they would have scoffed at a few years ago.
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