Reviewed by Sep 30, 2020| Updated on
A boutique is a small monetary firm that provides specialised services for a particular section of the market. Boutique firms are most common in investment banking or investment management industries. These firms may specialise by industry, banking contract type, client asset size, or other factors to address a market that is not well covered by larger firms.
Smaller firms in the financial sector may flourish by locating themselves to serve a specific niche. Although they may lack the resources available with larger firms, boutique firms offer more individualised services and tailor-made offerings to the needs of their clients. Boutique firms are often founded by former employees of larger firms who wish to strike out on their own.
Boutiques often hire portfolio managers across different generations to provide a more holistic perspective and the ability to specialise in specific niches.
Boutique investment banks work with middle-market companies on smaller deals and usually assist on the sell-side in mergers and acquisitions. In addition, they sometimes specialise in certain industries, such as media, industrials, technology, health care, or energy.
Some banks may specialise in certain types of transactions, such as capital raising, mergers and acquisitions, or restructuring and reorganisation. Typically, boutique investment may have a limited number of offices and may specialise in certain geographic regions, thus the moniker, 'regional investment bank'.