Tuesday, May 17, 2016
The capital markets ecosystem, as a whole, thrived in 2015. (See Exhibit 1.) New pools of value are emerging, and opportunities abound amid ever-intensifying competition. Yet the sharp focus on investment banking performance over the past five years has masked a broader truth: banks are not the only players competing for revenue. Asset managers, hedge funds, high-frequency traders, exchanges, information service providers, clearing-houses, infrastructure firms, and custodians, for example, all have critical roles.
As banks retrench and relinquish control of the value chain, this broader set of industry participants is now being presented with an opportunity to compete for revenues that, traditionally, might not have been considered up for grabs. It is no coincidence that the past two years have been among the most active in the history of capital markets M&A. And firms today are moving strategically to capture as much as of the future revenue opportunities as possible.
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