For years, people have been extolling the virtues of boutique banks and trading outfits.
The standard view is that these firms are less encumbered by new regulations and stand to benefit greatly from an exodus of talent from bulge bracket banks. But executing on the promise has been hard for several of the big-name boutiques.
Lazard, one of the biggest names, has just picked up vote of confidence so to speak from activist investment fund Trian, led by Nelson Peltz, who's known for tussling with management of underperforming companies. This time, the dealings were cordial on the surface.
The hedge fund has announced that it owns a 5.1 percent stake in the bank and that it now "believes Lazard is a premier global financial services company with significant brand and franchise value. Lazard's attractive low capital-intensive, fee-based business model is positioned to be a natural beneficiary of long-term financial market trends."
Trian held several meetings with Lazard's management to discuss its business and strategies and came away impressed with Lazard's new strategic plan, announced in April. The news led to a bump in the stock prices, which is down for the year but not nearly down as much as some of the bulge bracket banks.
For Lazard management, the pressure is on. The fund is betting that the executive team will double the stock price. The cordial relationship can easily turn adversarial if it doesn't execute as promised.
- here's an article from Forbes