Top Middle Market Investment Banks by Sector

Summary:

Middle-market investment banks might not be as well-known as the bulge-bracket banks, but they are still crucial for both the global economy. Working for one of them is a great way to get a step on the investment banking career ladder. Middle-market investment banks will generally work on deal sizes of less than $500 million and often specialize in certain types of advisory and industry subsets. Among the different options in the investment banking industry, middle-market investment banks can offer experience with a lower number of hours than large bulge-bracket investment banks.

Investment banking jobs are some of the most sought-after and competitive jobs currently available in finance. Not only are the hours notoriously long, but the industry’s cutthroat nature can leave people burned out in just a couple of years. However, it’s also one of the most lucrative careers, with many people earning seven figures (including bonuses) by their 30s.

Each investment bank is different, though. There are bulge-bracket behemoths, like Morgan Stanley and J.P. Morgan, and then there are lesser-known middle-market investment banks. Finding a job at a middle-market investment bank like the ones listed below might be the best way to start your career in this field.

What are middle-market investment banks?

A middle-market investment bank is an all-encompassing investment banking firm that offers advisory services including those related to debt, equity corporate structuring, tax, corporate finance, asset management, equity research, and M&A (mergers and acquisitions) advisory services. Middle-market banks tend to work on deals worth less than $500 million, differing from other firms, such as bulge brackets or elite boutiques. Furthermore, middle-market investment banks tend to have more expertise in certain industries and will have portfolio companies related to those industries.

Top middle-market investment banks by sector

Plenty of investment banks are outside the top tier, in which mostly bulge brackets reside. Middle-market investment banks also deal with middle-market companies across a variety of industries. Therefore, it’s best to narrow them down by specialty. We will look at the top-tier mid-market investment banks and middle-market firms in the following areas:

  • Energy
  • Industrial
  • Food
  • E-Commerce/Brands
  • Defense, Aerospace, and Government Services

Our methodology looks at the following categories:

Deal size

The investment banks on our list will generally work on deal sizes of less than $500 million (although some notable transactions will have deals over $500 million).

Areas of focus

Each investment bank on our list has a track record and portfolio of deals in certain industries in which they specialize. This is not to say that they don’t offer advisory services for other companies; it’s simply to say that they focus on some areas more than others.

Notable transactions

We’ll look at some recent and/or notable transactions in the sectors that they specialize in. We will list some of those transactions below each investment bank.

Energy

Marathon Capital

Founded in 1999 and headquartered in Chicago, Marathon Capital is an investment bank that has been involved in numerous transactions, including M&A, capital raising, project finance, and tax equity advisory, among others.

They focus on energy and infrastructure technologies that deliver clean, sustainable energy that can be utilized throughout all kinds of markets. Many of their deals focus on M&A advisories for top energy firms around the world, including locations outside of the U.S., such as Canada and the European Union.

Notable transactions

  •  Acted as a financial advisor to H Cycle in their Series A capital fundraising that led to successful placement by Azimuth Capital Management and ENEOS Innovation Partners
  • Advised Omega, a company involved in the exploration and development of hydrocarbons, in their debt financing needs

Parella Weinberg

Perella Weinberg is an international investment bank that provides a range of advisory services, including mergers and acquisitions, growth and capital markets, restructuring and liability management, special committee advisory, and shareholder engagement.

The company has advised some absolutely mammoth transactions in all industries, but some of its track record in energy has been the most impressive.

Notable transactions

  • Advised Denbury, a pipeline company with carbon capture expertise, on their $4.8-billion acquisition by ExxonMobil
  • Advised 3Bear Energy, an energy company focused on greenfield energy development, in its sale to Delek Logistics Partners
  • Financial advisor to Royal Dutch Shell with the sale of its Permian business to ConocoPhillips

Industrial

The Hatteras Group

The Hatteras Group is an investment bank specializing in companies in the industrial sector. They advise on the buy side and sell side of companies involved in mergers and acquisitions and can assist in capital raising and equity placement. Some of the sectors they specialize in are:

  • HVAC/R, mechanical contractors
  • Industrial distribution and value-added resellers
  • Specialty contractors/industrial services
  • Trucking, transportation, and logistics
  • U.S. federal government services
  • Niche manufacturing – textiles, wood products, metal fabrication

Notable transactions

  • Advising an industrial group looking to acquire middle-market manufacturers (buy side)
  • Advising a flow control manufacturer looking to acquire competitors (buy side)
  • Advising a 40-year-old metal parts fabricator looking to sell (sell side)
  • Advising on a commercial and industrial HVAC services company where the owner was looking to sell as they were retiring (sell side)

William Blair and Co.

William Blair and Co. is a middle-market investment bank located in Chicago. Blair is one of the world’s most well-known and fully diversified middle-market investment banks and has had much success in the industrial space over time.

The company has dealt with equity capital markets, private equity, and M&A on both the buy side and sell side. Their industrial growth products team deals in the following subsets:

  • Automated systems
  • Building technologies
  • Diversified industrials
  • Energy and sustainability
  • Engineered components
  • Flow control and filtration
  • Packaging
  • Safety and Security
  • Sensors and instrumentation
  • Specialty materials and chemicals

Notable transactions

  • William Blair acted as exclusive financial advisor to Ardian in connection with its pending acquisition of LIFTKET, a portfolio company of Afinum.
  • William Blair acted as the exclusive financial advisor to Durex International Corporation in connection with its pending sale to Spirax-Sarco Engineering plc.

Food

Focus Investment Banking

Ranked as a Top-5 investment bank by Axial in 2022, Focus Investment Banking focuses on a variety of industries ranging from agriculture to consumer goods. However, their track record would indicate specialization in companies that are more related to the food industry.

Notable transactions

  • Acting as an advisor to Tesco to acquire Joyce’s
  • Underwriting the IPO of everyone’s favorite donut addiction, Krispy Kreme

E-Commerce/Brands

Two Roads Advisors

Two Roads Advisors principals have advised on 125 different transactions with a value totaling $15 billion in aggregate transaction volume. They have had particular success advising companies involved in brands and the e-commerce space.

They provide buy-side and sell-side advice for mergers and acquisitions, capital raising, and corporate strategy and performance advice. They can also assist with private equity placements.

Notable transactions

  • Advised on TINT, an all-in-one social content platform, acquiring Vesta, the brand community platform
  • Advised on DERMAdoctor, an omnichannel and e-commerce beauty brand, entering into a strategic relationship with the online marketplace Orchard Mile
  • Advised Lensabl, an optical e-commerce platform, on closing a minority investment from a strategic investor.

Pro Tip

Some companies might want to think twice before they engage investment banks, according to Alex Milzer, a successful entrepreneur in the senior living space. “We were in conversations with an investment bank about a possible acquisition of one of our companies, Senior Directory, by a much larger competitor,” he says. “We found that the investment bank did not really understand our industry, and thus it was difficult to explain some of the nuances in relation to what we wanted. In the end, we didn’t end up selling the company, but we might have reconsidered if we were to receive better service.”

Defense, Aerospace, Government Services

Harris Williams and Co.

Harris Williams and Co. is a company that previously cut its teeth in the leveraged buyout business and now focuses on M&A advisory services. They are an investment bank with a track record specializing in companies in the defense industry and receiving much of their business from government contracts.

This includes working with companies in private aerospace that might not yet have access to large government contracts.

Notable transactions

  • Harris Williams advised Ross Aviation, a premier nationwide network of Fixed Based Operators, on its merger with Atlantic Aviation.
  • Harris Williams advised on the sell side for International Marine and Industrial Applicators, a critical vessel preservation, scaffolding, and environment containment company. The company provided the majority of its services to the U.S. government and was acquired by Stellex in partnership with the Carlyle Group.

Explore your career options

Are you looking to shift gears in your career? Take a look at some of the best-paying jobs in major banks, technology, and consumer services. And if you’d just like to make a little more income, take a look at these side hustles, many of which you can do from home.

FAQ

What is middle-market investment banking?

Middle-market investment banks are smaller but perform similar tasks to major bulge-bracket investment banks, including debt, equity corporate structuring, and tax and M&A advisory services. They will have revenue under $500 million annually and, in many cases, have niches and specializations that bulge brackets do not.

What are examples of mid-market investment banks?

Some of the more notable mid-market investment banks include William Blair and Company and Two Roads Advisors.

Is Wells Fargo a middle-market investment bank?

No, Wells Fargo is not an investment bank. It is one of the giants of retail banking in the United States. Investment banks offer services that are different than what the general population requires with retail banking.

Is J.P. Morgan middle market?

No, J.P. Morgan is not in the middle market; it is a top-tier bulge-bracket investment bank.

What are the Big 4 investment banks?

The Big-4 investment banks are J.P. Morgan, Goldman Sachs, Citigroup, and Morgan Stanley.

Key takeaways

  • Middle-market investment banks might not be as well-known as the bulge-bracket banks, but they are still crucial for the global economy. They are great places to get a step on the investment banking career ladder.
  • Middle-market investment banks differ from their bulge-bracket cousins in that they are generally more specialized and have a revenue of less than $500 million.
  • Most middle-market banks offer a suite of M&A (mergers and acquisitions) services both on the buy side and sell side, as well as services such as tax advising, debt capital markets, equity capital markets, and corporate restructuring, among others.
  • Middle-market investment banks are a great alternative to bulge-bracket banks in that they may offer more localized offices, as well as specialties and niches within an industry.
View Article Sources
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  7. What Companies Are In The Technology Field? – SuperMoney
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  9. What Is the Best Method for Raising Capital for a Startup Business? – SuperMoney
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