LionTree Advisors LLC (0702483D:US), a boutique firm started seven months ago by analyst-turned-banker Aryeh Bourkoff, 40, and Ehren Stenzler, 37, is riding a wave of media deals to land among the top financial advisers so far this year.
Started in July by the two former UBS AG investment bankers, New York-based LionTree advised Liberty Global Inc. in its $16 billion acquisition of U.K. cable operator Virgin Media Inc., announced Feb. 6. Also this week, it advised Warner Music Group in its purchase of EMI Group’s Parlophone Label Group from Universal Music Group for $764 million.
With the two deals, LionTree jumped to fourth place on the global league table of financial advisers for media mergers and acquisitions, according to data compiled by Bloomberg. The rapid climb shows how LionTree is benefiting from the enthusiasm for media dealmaking, and underscores how a few big deals can propel small firms to the top of the ranks, at least temporarily.
“M&A activity has picked up recently, in particular in the technology, media, telecom space,” Stenzler said in an interview. “With the current strength of the financing markets and better visibility into the economic recovery, there exists an increased appetite to pursue strategic acquisitions.”
Stenzler, who sees the trend continuing, declined to discuss LionTree’s strategy.
Since the beginning of the year, 180 media deals were announced worth almost $40 billion, more than seven times the $5.60 billion volume of media deals announced in the same period last year, the data compiled by Bloomberg show.
In the league table for media advisors, Credit Suisse Group AG, which also advised Liberty Global and Warner Music, ranks at the top, followed by Goldman Sachs Group Inc. and JPMorgan Chase & Co.
LionTree, which at the end of 2012 ranked 70th in the league table of all global M&A financial advisers, is now eighth, according to the data compiled by Bloomberg. Among the more established boutique firms, Lazard Ltd. ranked 11th in 2012, Evercore Partners Inc. was 15th and Greenhill & Co. was 18th.
The cyclical nature of dealmaking, which last year was subdued globally across all industries, as well as competition from bigger firms, may challenge LionTree’s ambition to grow.
While boutique firms have lower costs and a perceived advantage in being independent, they may have fewer areas of expertise.
“They rely more heavily on one or two product areas, which can limit their growth when those areas are less active,” said Mort Pierce, partner in the M&A group of law firm White & Case LLP in New York.
LionTree, whose office on Manhattan’s Madison Avenue counts 11 employees, focuses its advisory on media, telecommunications and Internet companies -- the industries Bourkoff and Stenzler specialized in at UBS.
Bourkoff, LionTree’s chief executive officer, started at UBS in 1999 in the fixed-income clearing group, becoming an equity media analyst the next year. In 2007 he switched to UBS’s investment banking side, an unusual career move for Wall Street, becoming global co-head of advisory for technology, media and telecom.
In March 2011 Bourkoff was promoted to the head of UBS investment banking for the Americas, staying for only 13 months until he left to start his own firm.
Stenzler, LionTree’s co-founder and managing partner, was UBS’s co-head of Americas M&A practice from June 2011 to April 2012, after leading the telecom, media, technology M&A team.
The two bankers were involved in some of the media industry’s biggest deals. In 2011, while at UBS, they advised Comcast Corp. on its acquisition of NBC Universal for $13.8 billion and Sony Corp. in its $2.2 billion purchase of EMI’s publishing business. Also that year, they handled Len Blavatnik’s Access Industries Holdings in its $3.3 billion takeover of Warner Music Group. They also advised Charter Communications Inc. on its restructuring after bankruptcy.
Bourkoff and Stenzler climbed the ladder at UBS’s investment bank as the largest Swiss bank struggled with defections in the U.S. when it cut its bonus pool by 80 percent following the 2008 credit crisis.
“Investment banks of every size have their certain benefits and challenges,” said Pierce.
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