When SoundView Technology Group decided to sell itself to Charles Schwab Corp. for $321 million in November, the firm didn’t retain Goldman Sachs, an early investor in SoundView and its investment banker since its June 1999 IPO. (It was then known as Wit Capital Group.) Instead, SoundView called on Financial Technology Partners, a young boutique run by former Goldman banker Steve McLaughlin.
It was the second notable deal for McLaughlin’s 18-month-old firm, which is one of a host of recently formed shops seeking to snare business from bulge-bracket banks. In 2002 McLaughlin advised trading technology company Tradescape on its $280 million sale to E*Trade Group. The 34-year-old Wharton MBA also is advising a private equity firm on a roughly $1 billion acquisition in the financial technology sector; he expects the deal to be announced in the coming weeks.
These successes notwithstanding, McLaughlin says not to expect FT Partners to follow the route of some other boutiques that are seeking to occupy the niche once filled by firms like Alex. Brown & Sons, Hambrecht & Quist, Montgomery Securities and Robertson Stephens, which sold out to larger institutions during the bull market. He’s sticking to the advisory business, which requires relatively low overhead and can thus show bigger -- and faster -- profits than the underwriting, sales and trading operations at larger, more diversified firms.
Says McLaughlin: “If you look at any of the bulge-bracket houses, M&A is more profitable than the whole firm. That’s what we’re going after.”
