Merchant Banking Services in the US - Industry Market Research Report

Good investment: Increased private capital investment and financial market yields will benefit merchant banks

The Merchant Banking Services industry has grown moderately through the end of 2023. Merchant banks provide equity, debt and trade financing to middle-market private companies. Merchant banks often invest in the debt of private companies in the form of mezzanine financing and senior loans. Regarding trade financing, merchant banks provide foreign corporate investment and international transaction facilitation services; they also offer lines of credit and issue letters of credit between importers and exporters. While large financial holding companies, like The Goldman Sachs Group Inc. (Goldman Sachs), have merchant banking segments or subsidiaries, most merchant banks are relatively small and specialized, with the average enterprise employing about 21 individuals.

Overall, industry revenue has grown at an average annualized 7.9% over the past five years and is expected to total $14.8 billion in 2023, when revenue will jump by an estimated 5.2%. Profit is also expected to increase, from 34.3% of industry revenue in 2018 to 42.4% in 2023.

This industry primarily makes private equity investments with firm or investor capital into the securities of private or public companies. It also provides a wide range of ancillary bridge, mezzanine, real estate and distressed financing as well as international trade financing and foreign direct investment services in varying degrees. This industry is a segment of the Investment Banking and Securities Dealing industry (report 52311).

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry's key players and their market shares.