The latter does substantially more deals for its clients than the former – almost 500 more so far this year. But Goldman’s revenues are almost 20% higher, and its average revenues per deal are bigger by almost 65%.
Of course, the Dealogic data does not capture the entire revenue base. But it illustrates something that gnaws at Morgan Stanley’s bankers. A senior investment banker at the firm says: “Goldman is simply better at asking for fees. Our bankers can be a bit too apologetic. They don’t want to push the client. They want the next bit of business too.”
Goldman, of course, has a different view on this. A partner there says, cuttingly: “Our clients are prepared to pay more for our services because the quality and value of what we bring to them are higher. Period.”
Of course, it’s not quite so simple. There are a number of things Morgan Stanley bankers admit, when pushed, that have historically held them back. Goldman has marginally better contacts at CEO level and is therefore more part of the strategic conversation. That also helps them get on more sell-side mandates, where fees are almost guaranteed.