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Candid talk about
sell‑side vs. buy‑side
and selecting an
investment bank

Candid talk about
sell‑side vs. buy‑side
and selecting an
investment bank

There is something about investment banks and their mandates that many of them might not love to talk about, but at RJM, we are always candid, and we think this is something that clients of any investment bank should know.

It's well known that many investment banks, particularly large ones, are set up essentially to commoditize deals and stack up as many closes as possible. They are deal assembly lines. There are some great people who work at these firms, but ultimately, they can't fight the system, and they can't spend a lot of time focusing on ideal solutions for individual clients.

What's far less known,
however, is that many investment banks gravitate heavily toward a sell-side mandate partly because sales are easier to commoditize than buys—and this preference for sell⁠-⁠side work ends up being less than ideal for both buy⁠-⁠side and sell⁠-⁠side clients of these firms.

You might think that leaning toward sell⁠-⁠side work would make an investment bank a better sell⁠-⁠side advisor for clients.

In fact, the opposite is true.

That’s because expertise in creating the most strategically and financially successful transactions for sellers can be developed only if you truly understand what buyers want and are willing to do.

And you can truly understand buyers, especially those in a given industry, only if you represent them frequently.

At RJM, we resist “sell⁠-⁠side drift” because we believe that our very active buy⁠-⁠side practice helps us serve both sell⁠-⁠side and buy⁠-⁠side clients better. The way we think of it is, “We are better on the sell side because we are the best on the buy side.”

We recommend to potential clients, in considering an advisor for an acquisition or a sale, ask them what portion of their work is on the buy side vs. the sell side. The answer you want to hear, in our view, is “strong focus on buy,” because that suggests a more individualized approach and can support outstanding results for both buy⁠-⁠side and sell⁠-⁠side clients.

At RJM, we resist “sell⁠-⁠side drift” because we believe that our very active buy⁠-⁠side practice helps us serve both sell⁠-⁠side and buy⁠-⁠side clients better. The way we think of it is, “We are better on the sell side because we are the best on the buy side.”

We recommend to potential clients, in considering an advisor for an acquisition or a sale, ask them what portion of their work is on the buy side vs. the sell side. The answer you want to hear, in our view, is “strong focus on buy,” because that suggests a more individualized approach and can support outstanding results for both buy⁠-⁠side and sell⁠-⁠side clients.

Not just creativity—
rigorous creativity

Many advisory firms tout how “creative” they are, but they don’t tend to say what that means beyond bland descriptions like “connecting the dots” or “thinking outside the box.”

At RJM, we think creativity is one of the most valuable assets an advisor can offer, but to fulfill that potential, the whole setup of the firm needs to promote creativity⁠—⁠and that is the case at RJM.

Unlike most larger, more-bureaucratic advisory firms, our process includes multiple senior advisor input internally for every client and includes lively internal debate, and pitting alternate scenarios against each other, to illuminate and clear the way to the most optimal solution for the client.

In fact, if an internal meeting of RJM advisors on a key client strategy doesn’t involve some disagreement and constructive debate, we will wonder “what went wrong?” at that meeting!

So our definition of creativity is a bit different:

We don’t assume that we know the best answer up front.

When a path to client success is not clear, we will create that path. There is always a path—an advisor must be tenacious and flexible enough to find it.

We are candid with clients even when a message is not what they want or expect to hear. Honesty, not sweet talk, leads to the best results for the client.

Everything we do is driven by outcome, not by blind devotion to a particular process or traditional construct.

The only benchmark is client success. As a firm, we put that ahead of an easier path, and even ahead of deal volume. (We are very consciously about quality above volume.)