French brothers' M&A boutique had a horrible 2023, but didn't cut staff
It's an unfortunate truth that if you work for a boutique investment bank whose primary focus is M&A and there are no M&A deals to be done, you will not earn many fees. Zaoui & Co, the London-based M&A firm run by the brother Michael and Yoël Zaoui, formerly of Morgan Stanley and Goldman Sachs, is a case in point.
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Zaoui & Co. Ltd. has just released its accounts for 2023. Turnover during the year went from £19m to £4m and the boutique went from an operating profit of £8.6m in 2023 to a loss of £2.9m last year.
In the circumstances, it might be expected that Zaoui & Co. would have jettisoned staff. Instead, it appears to have sat it out: the boutique began and ended 2023 with 17 people.
Pay was cut, but it could have been worse.
Spending on wages and salaries went from £6.1m in 2022 to £4.3m in 2023, a decline of 29% which still looks moderate in the circumstances. The average employee earned £253k.
In 2020, when Zaoui & Co. made a record £11m in operating profits, there were only 15 employees. They were paid an average of £354k each.
How do the Zaouis plan to redeem the situation in 2024? The filling is short on details, but global M&A fees were at least up 9% year-on-year in the first half according to BCG. If things don't improve, they could prune headcount back to 2020 levels. There are other options: Yoel Zaoui could sell his $26m condominium overlooking Central Park if things get really desperate.
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