What it means
League tables are published by data providers and financial news organisations, who collect deal information and rank firms by total value or number of transactions. Separate tables exist for different activities, such as mergers and acquisitions advice, equity offerings, bond issuance and syndicated loans.
They are usually produced each quarter and each year, and sometimes by region or sector. A bank that tops a league table gains a reputational boost, because clients often see rank as a sign of experience and market reach.
Banks therefore advertise their position, and senior bankers are sometimes judged internally on whether the firm has climbed or fallen. Companies planning a deal look at the relevant table to build a shortlist of advisers.
Credit for a deal is allocated according to rules set by the table's compiler. In some tables the full deal value is credited to each adviser involved, which inflates totals.
In others the value is split between the participants, so a bank sharing a deal with three others gets a fraction of the value. Finance professionals should read league tables with care.
They measure volume, not quality, profitability or client satisfaction, and a bank can climb by doing many low-fee deals. Rankings can also be reshuffled by a single large transaction, so a short period can be misleading.
The idea also appears outside investment banking, in rankings of universities, business schools and funds, which are sometimes called league tables as well. Each uses different criteria, so it is worth checking the method before relying on a ranking.
A good habit is to compare the table with the actual fee income and the client list.
In practice
Real-world examples.
Example
A mid-sized manufacturer wants to sell a division and reviews the M&A league table for its sector. It invites the top five advisers by deal value to pitch. The finance director also asks about each bank's recent deals of a similar size.
Example
An investment bank announces in its press release that it ranked first in European bond issuance for the year. A competitor points out that the ranking counts full credit for every joint deal. The company's treasurer reads the table's methodology before drawing any conclusion.
Example
A bank's head of equity capital markets is told that the team slipped from fifth to eighth place after a quarter with few listings. She asks the data team for a breakdown of the market and discovers that a few very large offerings were taken by other firms. The bank decides to focus on mid-sized deals where it has an advantage.
Formula
Calculation
Market share % = bank's credited deal value / total market deal value x 100
In a quarter, the total value of all mergers advised in a region is $400,000,000,000. Bank A is credited with $60,000,000,000 of deals, so its market share is 60,000,000,000 / 400,000,000,000 x 100 = 15%. Bank B is credited with $48,000,000,000, which is 12%. If Bank A advised on a $20,000,000,000 deal alongside one other bank and credit was split equally, only $10,000,000,000 would count, whereas a full-credit table would count the whole $20,000,000,000.Case study
Seen in the real world.
Crestwell Partners is an illustrative, fictional boutique advisory firm that wanted to win more mergers work in the healthcare sector. Its head of business development studied the quarterly league table and saw that the firm ranked tenth by value but fourth by number of deals.
She realised that the firm was winning many mid-sized deals but few mega deals, so ranking by value understated its experience. The firm began presenting its record by number of transactions in the $100,000,000 to $500,000,000 range, where it was in the top three. Over the next year it won four new mandates, worth an illustrative $6,000,000 in fees, and the lesson is that choosing the right measure of rank matters as much as the rank itself.
Watch out
Common mistakes.
- Reading the top-ranked firm as the best adviser for any deal, when the ranking reflects volume and not quality or fit.
- Ignoring how credit is shared among advisers, which can make two tables on the same deals look very different.
- Drawing conclusions from a single quarter, when one large transaction can reshuffle the ranking.
Questions
People also ask.
Who compiles league tables?
Data providers and financial news organisations collect deal information and rank firms using their own published rules.
Do league tables show how profitable a bank is?
No. They show activity, and a firm can rank highly while earning low fees on each deal.
Why do banks care so much about their position?
Rankings influence how clients choose advisers and how staff are judged, so a higher place can bring more mandates.
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