Could boutique investment banks be on the rebound?

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There are early signs that boutique investment banks are staging a rebound after years in the wilderness.

Two independent firms grabbed a slice of the investment banking fees in Osisko Gold Royalties Ltd.'s $1.13-billion acquisition of precious metals assets from Orion Mine Finance Group. The cash-and-stock deal, which was announced Monday, sent Osisko's share price almost 14 per cent higher to $16.35. With the deal, Osisko will add a diverse roster of cash-generating assets to its portfolio.

Independent investment bank Maxit Capital LP is Osisko's lead financial adviser and also produced a fairness report for Osisko's board. BMO Nesbitt Burns Inc., National Bank Financial Inc. and PricewaterhouseCoopers were also named as advisers for Osisko. On the other side the deal, Orion turned to CIBC World Markets Inc. and boutique Haywood Securities Inc. for financial advice.

The win for the boutiques goes against the conventional narrative of big banks muscling out their smaller brethren on billion-dollar-plus deals.

Toronto-based Maxit was founded in 2013 by veteran investment banker Bob Sangha. The firm shuns the traditional model of a full-service investment bank, offering only advice. Maxit does not have a sales and trading desk, and it does not write traditional research reports. The firm makes the claim that its advice is conflict-free, because it is not chasing a fee for underwriting a bought deal, which some allege puts full-service dealers in a conflicted position. Mr. Sangha's relationship with Osisko goes back about a decade, when he worked for BMO. Mr. Sangha continued the relationship during his tenure with Dundee Securities, now known as Eight Capital. After Maxit was set up, the boutique advised Osisko on its $408-million (U.S.) acquisition of Virginia Mines Inc. in 2014.

"They are an outstanding firm. They provide great advice," Bryan Coates, president of Osisko, said in an interview.

In 2014, Osisko worked alongside Maxit to fend off a hostile takeover attempt from industry behemoth Goldcorp Inc. The company, then known as Osisko Mining Corp., instead agreed to be acquired by Yamana Gold Inc. and Agnico Eagle Mines Ltd.

"They are very well experienced and respected in the mining circle," Mr. Coates said of Mr. Sangha and Maxit's managing partner, Sandeep Singh.

While Osisko is one of Maxit's top clients, the firm has also landed lucrative advisory mandates with Kirkland Lake Gold Ltd., Alamos Gold Inc. and Premier Gold Mines Ltd. over the past few years.

Around 50 boutiques either went out of business or were acquired in distressed sells during the latest commodities slump that ran roughly between 2013 and 2016. A rebound in the commodities sector over the past 18 months has helped reinvigorate the independent sector.

In 2017, GMP Securities LP advised Eldorado Gold Corp. on its $590-million deal for Integra Gold Corp., while Haywood worked on a smaller tie-up between Luna Gold Corp. and JDL Gold Corp.