Wall Street Giants Battle a Secret Deal Whisperer on Tech IPOs
As Qatalyst works the sidelines of IPOs, Morgan Stanley and other banks seek assurances from startups to avoid losing advisory fees
Frank Quattrone, co-founder and executive chairman of Qatalyst (left), and George Boutros, chief executive officer of Qatalyst (right).
Source: Qatalyst
When Pagerduty Inc. hired investment banks for its initial public offering earlier this year, Morgan Stanley turned the conversation to another possible outcome: a sale of the startup. The Wall Street giant wanted to make sure it would still be an adviser if Pagerduty ended up getting acquired instead of listing on the New York Stock Exchange as planned.
Morgan Stanley’s bid for reassurance was driven in part by an increasing threat from boutique investment banks, in particular Frank Quattrone’s Qatalyst Partners, which have become adept at finding acquisition deals for technology companies in the final stages of IPOs. That means big fees for Qatalyst and other boutiques such as Centerview Partners, and higher rankings on league tables that measure banking clout. Meanwhile, Morgan Stanley and bulge-bracket peers such as Goldman Sachs Group Inc. and JPMorgan Chase & Co. risk being left with no reward after months of work prepping companies for public listings.