A finding from this year’s Peter Lee Associates Corporate Advisory research program is that, whilst idea generation and working hard at being proactive on behalf of your client will win you their respect, on their own these capabilities are not enough to ensure you receive the mandate.
Our research clearly shows that, when it comes to awarding an M&A mandate, it is much more important from the client’s perspective that you can successfully execute on their behalf. It is no coincidence, perhaps, that the Banks having the most success are also the ones deemed best able to deliver the whole team. In fact, our research shows that it is the same group of banks that fill the top five positions in both categories.
Whilst not being seen as amongst the best in class when it comes to execution is a negative it is not always a deal breaker. Many corporates still award mandates to firms that bring them ideas. The issue then becomes that they are more likely to use a syndicate of banks to ensure the deal gets done — the average number of “close” Advisory Relationships cited by our respondents is almost four. Yes, you will get paid for your ideas but it is more than likely you will have to share the proceeds with your competitors. Respondents told us that they pay 61% of all fees to their lead Bank whilst the balance is shared amongst the remainder of the syndicate.