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The merchant banking services market size is forecast to increase by USD 18.68 billion, at a CAGR of 4.83% between 2023 and 2028. The analysis of market growth is influenced by several key factors. Firstly, there is a notable increase in merger and acquisition (M&A) activities. Companies are increasingly opting for M&A deals to expand their market presence, consolidate resources, and gain competitive advantages. Secondly, there is a growing trend in initial public offerings (IPOs). More companies are entering the public market to raise capital, enhance visibility, and enable shareholder liquidity, driving market expansion. Lastly, there is a rising demand for portfolio management services. As investors seek diversified and professionally managed investment portfolios, the demand for portfolio management services continues to grow, influencing market dynamics.
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Merchant banking is a specialized area of financial services that caters to the unique needs of businesses, particularly Small and Medium Enterprises (SMEs) and Startups. Merchant banks offer various services such as asset management, business restructuring, mergers, credit syndication, loan syndication, portfolio management, corporate advice, mutual fund management, nonresident investment advice, and international markets participation. Banks and Non-banking financial institutions offer merchant banking services. Merchant banks play a crucial role in the capital markets by facilitating Initial Public Offerings (IPOs) for businesses, providing advisory services, and managing the financial aspects of Mergers and Acquisitions. They also offer high-net-worth individuals investment opportunities through various financial instruments. Merchant banking services have gained significant importance in recent times due to the increasing number of business restructuring and the growing trend of Foreign Direct Investment. The participation of investment firms in IPOs and the role of SoftBank and other prominent players like Greengage, Panatonni, and Future Business Insight in providing merchant banking services have further propelled the market's growth. The investment climates of various international markets and the role of credit syndication in providing capital to businesses have also contributed to the market's expansion.
Increased adoption in M&A deals is notably driving market growth. In the past, enterprises handled mergers and acquisitions (M&A) transactions in-house, storing crucial deal information in physical data rooms. However, with an escalating volume of M&A activities and the growing emphasis on risk management and cost savings, businesses have increasingly opted for the expertise of merchant banking services.
Moreover, merchant banks provide strategic advisory services for M&A deals and conduct thorough due diligence, leveraging advanced technologies such as Artificial Intelligence (AI) and machine learning to analyze vast amounts of data. The significant cost advantages associated with outsourcing these services to merchant banks have fueled substantial market demand, particularly among large enterprises in the LAMEA region. Thus, such factors are driving the growth of the market during the forecast period.
Growing number of unicorn startups in APAC is the key trend in the market. In the dynamic business landscape of the Late-Latent America and Asia Pacific (APAC) regions, Merchant Banking Services Market is experiencing significant growth. Artificial Intelligence (AI) and machine learning technologies are increasingly being adopted to enhance operational efficiency and improve decision-making processes in this sector. The number of startups and mergers and acquisitions (M&A) activities is on the rise in leading APAC countries like China and India.
For instance, since 2004, the number of M&A deals in India has surged by over 30%. As of the 2021 global unicorn index, India ranked third globally with 54 new unicorns, while China led APAC by adding 74 new unicorns. Beijing, Shanghai, and Shenzhen are major cities in APAC contributing significantly to the global unicorn index. This trend is expected to continue, as these cities are hubs for innovation and technological advancements. Thus, such trends will shape the growth of the market during the forecast period.
Increasing data security concerns is the major challenge that affects the growth of the market. In the dynamic business landscape of LAMEA (LatAmerica, Middle East, and Africa), the adoption of advanced technologies such as Artificial Intelligence (AI) and machine learning in Merchant Banking Services (MBS) is increasingly becoming a priority for businesses. These technologies enable efficient data analysis, risk assessment, and fraud detection, thereby enhancing the overall performance of Business Financial Services (BFS).
However, the sensitivity of business data necessitates stringent security measures. Merchant banking service providers are granted access control to manage administrative and regulatory tasks, but data security concerns persist. The financial institution is planning an Initial Public Offering (IPO) to expand its business client base in the individual segment, bolster project and issue management capabilities, and attract foreign investments as a provider of comprehensive financial services. Hence, the above factors will impede the growth of the market during the forecast period
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The business segment is estimated to witness significant growth during the forecast period. Merchant banking services cater to the financial needs of small, medium enterprises (SMEs), startups, and businesses undergoing mergers and acquisitions. These services include asset management, business restructuring, credit and loan syndication, portfolio management, corporate advice, and investment strategies. Merchant banks act as intermediaries between businesses and financial institutions, providing access to capital markets and international markets for IPO participation and foreign direct investment. They offer financial services to various segments such as high-net-worth individuals (HNIs), mutual funds, pension funds, global corporates, charity organizations, and individual and business clients.
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The business segment accounted for USD 42.31 billion in 2018. Merchant banks also provide investment strategies for various investment firms, insurance companies, hedge funds, and active portfolio management. With the digital transformation and the rise of fintech, merchant banks are leveraging technology to enhance their services and provide more efficient solutions. SoftBank, Greengage, Panatonni, and other leading merchant banking providers are at the forefront of this evolution, offering innovative financial solutions to their clients.
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APAC is estimated to contribute 45% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Merchant banking services cater to the financial needs of small, medium enterprises (SMEs), startups, and businesses undergoing mergers and acquisitions. These services include asset management, business restructuring, credit and loan syndication, portfolio management, corporate advice, and investment strategies. Merchant banks act as intermediaries between businesses and financial institutions, providing access to capital markets and international markets for IPO participation and foreign direct investment.
Further, softBank, Greengage, Panatonni, and other merchant banking providers offer a range of financial services to high-net-worth individuals (HNIs), global corporates, charity organizations, mutual funds, pension funds, hedge funds, insurance companies, and individual segments. They employ active portfolio management and digital transformation technology to optimize investment climates and cater to diverse investment strategies. Merchant banks facilitate credit syndication, asset securitization, and investment in various sectors, such as technology, healthcare, energy, and infrastructure. They also provide advisory services on mergers, acquisitions, and other strategic business initiatives. In summary, merchant banking services play a crucial role in the financial ecosystem, offering tailored solutions to businesses and investors in an ever-evolving global economy.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion " for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
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Merchant banking is a specialized area of financial services that caters to the unique needs of businesses, particularly small and medium enterprises (SMEs) and startups. Merchant banks offer various services such as asset management, business restructuring, mergers and acquisitions, credit syndication, loan syndication, portfolio management, corporate advice, and capital markets. These services help businesses in their growth strategies, financial restructuring, and access to international markets.
Further, banks and non-banking financial institutions, including SoftBank, Panatonni, and others, provide merchant banking services. Merchant banks also cater to high-net-worth individuals (HNIs), mutual funds, international markets, global corporates, charity organizations, pension funds, hedge funds, and insurance companies. Merchant banking services have gained significance in the investment climates of various countries, with many businesses and financial institutions participating in Initial Public Offerings (IPOs) and Foreign Direct Investment (FDI). Digital transformation technology and fintech have also influenced merchant banking services, with providers offering active portfolio management and investment strategies to their clients. Merchant banks play a crucial role in providing financial services to businesses and individuals, facilitating loan syndication, asset management, and corporate advice.
Market Scope |
|
Report Coverage |
Details |
Page number |
142 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.83% |
Market growth 2024-2028 |
USD 18.68 billion |
Market structure |
Concentrated |
YoY growth 2023-2024(%) |
4.37 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 45% |
Key countries |
US, China, India, UK, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Bank of America Corp., Canara Bank, Citigroup Inc., DBS Bank Ltd, Deutsche Bank AG, ICICI Bank Ltd., JPMorgan Chase and Co., Morgan Stanley, Punjab National Bank, The Goldman Sachs Group Inc., UBS Group AG, and Wells Fargo and Co. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for market forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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