Boutique investment banks hiked pay and hired senior dealmakers as a rebound in M&A (Mergers and Acquisitions) work in 2025 had set them on course for a stellar year. The elite boutiques that work with big banks on large M&A deals have posted healthy upticks in fees during the third quarter and pointed to an appetite to add talent ahead of what is expected to be a bumper year.
The third quarter has proven particularly lucrative for boutiques. Evercore posted a record $1 billion in revenue, which was up 41 per cent on 2024; Moelis’s income was up 34 per cent to $356.9 million for the period; while PJT Partners unveiled a record third quarter revenue $447.1 million.
“Our backlogs right now are as high as they’ve ever been”, John Weinberg, chief executive of Evercore, told analysts during its third quarter earnings call. "Almost every sector that we cover seems to have real activity. The larger deals started earlier: "We’re seeing mid-sized deals really build and frankly, across the board, in terms of the industry sectors, large and small deals are being considered”.
Boutiques had embarked on a hiring spree in 2024 even as bigger rivals remained cautious about adding talent amidst muted deal activity. Many had pointed to recruitment over 2025 and beyond.
“We continue to add talent as we invest in our strategic advisory franchise and the firm more broadly”, said Paul Taubman, chief executive of PJT Partners, during its Q3 results. "As a result of our active recruiting efforts, our headcount overall has increased 7 per cent from a year ago”.
The sharp rebound in fees for boutiques in 2025 relieves some of the pressure faced by them coming into the year. Their counter-cyclical recruiting spree, combined with the fact that M&A dealmakers typically take up to 18 months to get up to speed in a new role, left them with elevated costs.
Analysts keenly watch ‘compensation ratios’ — how much ratio is eaten up by pay — when boutiques report their numbers. Boutiques’ compensation costs increased in 2025, as new hires and bigger bonus accruals have pushed up expenses. But the rise in their revenues has meant their compensation ratios have remained more or less the same.
Evercore’s compensation costs increased 27 per cent to $1.7 billion during the first nine months of the year, while Moelis hiked pay by 24 per cent to $712.6 million and PJT Partners by 13 per cent to $801.3 million.
“We are continuing to hire talent at all levels and plan to build this business into a market leader”, said Moelis chief executive Navid Mahmoodzadegan.
“If you look year-over-year our MD count has gone from 157 at this point last year to 170 today. And when you look at that, the gross number of MDs is roughly split half and half between internal promotes and external hiring”.
Evercore’s Weinberg said the bank was focused on expanding in Europe: “We have built out Europe significantly. We are feeling very optimistic about Europe. In terms of activity level, they did have a record quarter. It was broadly across sectors. We are seeing a growing strength”.
Wall street executives pointed to the return of “animal spirits” as the fuel for the recent deal boom. M&A volumes increased 40 per cent to nearly $4 trillion in 2025, according to data provider Dealogic, pushed by a surge in mega-deals in the US.
Privately, dealmakers point to several potential risks that could derail activity. These include geopolitical factors such as the ongoing trade war and the conflict in Ukraine.
While Taubman said he was optimistic about the outlook, he pointed to speed bumps that could scupper activity: “Continuing geopolitical uncertainty, a weakening labour market, stubbornly high interest rates and tariff dislocations, coupled with concerns of an AI bubble have the potential to derail this pickup in activity levels”.
Oman Observer is now on the WhatsApp channel. Click here
