Robey Warshaw makes the big league with role in BG sale

At the start of this week, a small London-based advisory firm run by two experienced dealmakers was nowhere to be found in this year's global rankings for investment banking activity.

By Thursday, Robey Warshaw had catapulted into eighth place, lifted by its role alongside Goldman Sachs in advising UK energy company BG Group on its £47bn sale to larger rival Royal Dutch Shell - one of the largest transactions ever in the oil and gas industry.

Robey Warshaw employs less than a dozen people, but its jump up the deal volume rankings puts it ahead of much larger financial institutions including UBS, Deutsche Bank, Credit Suisse and Barclays. It highlights how boutique advisory firms are gaining market share at the expense of the large investment banks.

Founded by former Morgan Stanley dealmaker Simon Robey and ex-UBS adviser Simon Warshaw, Robey Warshaw featured prominently in high-profile takeover situations last year, including AstraZeneca's defence against a bid by Pfizer.

In moving up the deal volume league tables, Robey Warshaw joins two other independent advisory firms in the top ten based on deal activity during the year to date. These firms - Lazard and Centerview - have been involved in some of this year's biggest transactions, including on either side of Heinz's $100bn merger with US foods group Kraft.

The advantage of working at a boutique firm is that the huge advisory fees associated with large deals are shared between a smaller number of people.

Thomson Reuters estimated that advisory fees from the Shell deal with BG will total $182.6m. This could make it the eighth largest fee-earning deal of all time, and Robey Warshaw could secure $50m for its role.

However, as some analysts have highlighted, boutique firms face the risk that they rely on just a few deals each year. The BG mandate is Robey Warshaw's first deal of 2015.

And even as independent advisory firms gain market share, certain big banks are doing fine. Goldman Sachs has solidified its leading position in the industry by advising BG.

The US investment bank has a 31 per cent market share of all deal volumes so far in 2015, putting it more than 10 percentage points ahead of its nearest rival.

That number two spot currently belongs to Bank of America Merrill Lynch, which as sole financial adviser to Shell, could earn $82m in fees from the deal.

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