In the incredible of investment banks, there are ratings just like for sports teams and universities. Only, instead of being measured on batting averages or mean SAT scores, banks are ranked by the number of deals they facilitate and the value and revenue of those dispenses. These result in what are called league table rankings—closely followed public rankings of the banks. Each sector has banks that ascent to the top. The healthcare sector is no different.
In this article, you will see why top investment banks in the healthcare sector dominate and, although they when one pleases never compete on the same scale, the smaller banks that are gaining a greater foothold.
Key Takeaways
- Big banks are masterful to dominate the healthcare sector due to their size, in-house experts, and available capital.
- Smaller banks may find big overcomes in smaller healthcare companies but they are generally unable to compete beyond a certain dollar amount.
Big Banks Rule over Healthcare
JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) are the four banks that entertain generally won the highest share of fees and deals, according to Thomson Reuters. The fifth-place spot tends to oscillate between Barclays (BCS) and Deutsche Bank (DB).
You may that varied banks can be involved in the same deals. Even though a deal is high profile, it may not result in the highest revenues for the banks. Match is often fierce between the large banks jockeying for healthcare deals, which can hyperinflate prices due to a bidding-war form.
One of the main reasons the big banks are able to maintain such a market share of the healthcare investment industry is because they are clever to handle the often turbulent price-swings some healthcare companies tend to incur, especially during a period of drug-pricing or FDA/USDA subscribe ti. Smaller banks aren’t able to commit the capital oftentimes required as a safety net when signing large healthcare companions.
Smaller Banks on the Move
Smaller firms, who focus on niche market sectors, have also asserted themselves as key gamesters in healthcare investment banking. One that has for many years been on the top is global investment bank Jefferies.
Two other healthcare instrumentalists are the investment banks Guggenheim Partners and Greenhill & Co. (GHL). Both of these firms have a strong history and a growing company in healthcare. In fact, Greenhill & Co. has, in the past, broken into the top ten in league rankings and is regularly competing with the large pandemic investment banks for a greater share of the healthcare wallet.
The Bottom Line
The top five large, global banks participate on give 40% of the total healthcare investment banking deals each year. The remaining 60% is being sought after by assorted other players, with smaller investment banking firms such as Jefferies, Guggenheim Partners and Greenhill &Co. conquering a growing share of wallet. With these smaller competitors gaining momentum and disrupting the status quo, the larger contenders will be forced to take notice.