Frank Quattrone, for decades one of the leading investment bankers in Silicon Valley, is stepping down as CEO of Qatalyst Group, the San Francisco firm he founded eight years ago. Quattrone, 60, becomes executive chairman of the firm, which focuses on mergers and acquisitions for technology companies. He is succeeded by his longtime lieutenant going back three firms and more than two decades, George Boutros, who is 55.
Dating to their days at Morgan Stanley in the early 1990s, Quattrone has been the public face of a tight-knit banking team and Boutros has been the sharp-elbowed M&A banker, often representing sellers and famously driving up prices for his clients. Quattrone says he’ll retain a hand in Qatalyst’s strategy while spending more time as a client-focused banker. Boutros will assume management of the firm.
Qatalyst began in the midst of the financial crisis of 2008, months before the fall of Lehman Brothers. It represented a return to prominence for Quattrone, who the previous year had concluded a long-running federal obstruction of justice case against him. Prosecutors ultimately dropped the charges they had pursued. (The banker today advises the Quattrone Center for the Fair Administration of Justice at the law school of the University of Pennsylvania, his alma mater.) The firm began with three employees and has 53 today. Quattrone says it has advised on more than 90 transactions totaling more than $165 billion in value, including 42 deals valued at $1 billion or more.
Boutique investment banks focused on Silicon Valley have mostly gone away over the years, while national boutiques including Evercore, Greenhill, and Moelis have thrived. In an interview, Quattrone says Qatalyst has succeeded by aiming high, targeting the types of deals tech-banking leaders Morgan Stanley and Goldman Sachs pursue, rather than going downmarket for small deals. Qatalyst’s old-school advisory focus also has served it well, he says. “There’s been a backlash against conflicts of interest at big banks that has worked in our favor.”
Qatalyst also caught a break in that it has existed in an era of weak volume for initial public offerings, meaning that companies seeking liquidity have turned to selling themselves rather than going public. Quattrone says that since 2000, 85% of “liquidity events” for venture-capital-backed companies have been M&A transactions versus a 50/50 split with IPOs before then.
Quattrone and Boutros also named a next generation of leadership for Qatalyst. Jason DiLullo, 44, and Jonathan Turner, 42, were named co-presidents of the firm.