Nicholas Valerio

"The advantages don't completely outweigh the negatives now in terms of going public," Valerio says. "The private markets are becoming a bigger marketplace,"...

Investment banking has always been a highly cyclical business, growing when the markets grow, shrinking when they shrink. But a combination of regulation, technology and investment suggests that, as stockbrokers have traditionally whispered in boom times, this time it’s different. The go-go era of investment banking that began in the mid-1980s and thrived up to the financial crisis appears to be on its way out, as the biggest banks shrink in response to regulation and smaller, more focused firms, funds, and start-ups take a larger share of the market. “It’s becoming a mature industry,” says George Kuznetsov, a London-based member of the executive board at Coalition, a banking data firm. Over the past few years, the number of banks with aspirations to become one of the world’s top three investment banks has shrunk from 10-15 to three, says Kuznetsov. Six years ago, in 2009-2010, all those large banks aspired to be one of the top three of almost everything. No longer. “At this point in time, that mentality doesn’t exist,” he says.