Bulge-bracket banks stand ground against boutique challenge

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* Boutique firms take 27 pct slice of investment banking fees

* Down slightly from last year but up over longer timeframe

* Global M&A fees for completed deals healthy at $6.72 bln

* GRAPHIC: Boutique M&A advisory: http://link.reuters.com/vyw54w

By Anjuli Davies

LONDON, April 21 (Reuters) - Boutique banks may have captured some of the juiciest M&A advisory roles in recent months, but an examination of the data shows the financial industry's big names are maintaining a dominant share of the market and its lucrative fees.

The emergence last week of Zaoui & Co, an advisory firm set up by two brothers, as sole adviser to Alcatel Lucent SA on its 15.6 billion euro ($17 billion) sale to Nokia (Swiss: NOK1V.SW - news) Oyj may have rattled some bigger rivals, echoing the $46 billion merger of H.J. Heinz Co and Kraft Foods (Sao Paolo: KFGI34.SA - news) Group Inc, where independent investment banks Lazard and Centerview beat the so-called bulge-bracket firms.

On Royal Dutch Shell Plc's $70 billion bid for energy company BG Group Plc (LSE: BG.L - news) , the latter was advised by boutique Robey Warshaw LLP as well as Goldman Sachs Group Inc .

But the big banks haven't been muscled out. So far this year, the slice of the pie taken by boutique firms has fallen slightly, to 27 percent or $1.79 billion out of $6.72 billion of global completed M&A advisory fees, data from Thomson Reuters and Freeman Consulting show.

That compares with 29 percent this time last year and 31 percent in 2013, but is up sharply over a longer timeframe.

"The market share of the big nine banks in revenue terms, not league tables, is really what shareholders should be concerned about," Christopher Wheeler, U.S. banks analyst at Atlantic Equities, said.

"The boutiques are clearly taking market share, but how noticeable is it? You have to differentiate between league tables and cash coming in the door."

GLOBAL FEES

Fees from advisory work in a booming global M&A market, which has seen activity rise 18 percent year-on-year so far, are still healthy at the top banks.

Global investment banking fees for completed M&A year-to-date total $6.72 billion, or 29 percent of investment banking revenues, data from Thomson Reuters and Freeman Consulting show.

That's slightly higher than this time last year, when M&A accounted for 26 percent of global investment banking fees, but significantly higher than in 2000 when it stood at 13 percent. During the M&A heyday in 2008, it was 39 percent.

Boutiques range from established firms like Lazard and Rothschild to "micro" outfits such as Zaoui and Robey Warshaw, which have evolved from the early 2000s, when they commanded just 14 percent of global advisory fees during the same period.

"The model has proved to be successful and success breeds success," said one boutique adviser, speaking on condition of anonymity.

"Not many people have the seniority and the calibre. There's a human element here. If you need a senior boardroom trusted adviser, you don't need an army of people. If you need mega financing for a deal you might."

Large banks tout their financing muscle as well as their prowess in areas ranging from currency hedging to treasury management to win big M&A assignments.

"The integrated model is still incredibly powerful. If you don't have the financing capability it gets very hard. Financing unlocks the deal," said one investment banker at a large firm.

The deal between Heinz and Kraft, which involves a share exchange sweetened by a dividend financed by Berkshire Hathaway (Sao Paolo: BERK34.SA - news) Inc and 3G, required no bank financing and thus no need for large firms. Nokia's bid for Alcatel Lucent was all-share.

"The boutiques are mainly only a feature in advisory, which remains a comparatively small pot of overall IB (investment banking) revenues," Piers Brown, investment banking analyst at Macqaurie, said.

"The big revenue pools still need a large balance sheet behind them ... and I wouldn't see much of a threat here." ($1 = 0.9359 euros) (Editing by David Holmes)