Exclusive: Houlihan Lokey hires Ellison as head of fintech
Illustration: Natalie Peeples/Axios
Houlihan Lokey named former Jefferies Vice Chairman and OurCrowd Chairman Alec Ellison as global head of fintech, the boutique investment bank told Axios exclusively on Monday.
Why it matters: The new group's creation comes as the firm sees opportunity for new kinds of fintech dealmaking in 2023 after last year's slowdown.
Driving the news: "We had a time of rapid over-financing. There's a tremendous amount of rationalization and consolidation that needs to happen," says Ellison.
- "It's a really opportune time to play a key role in this rationalization through M&A, occasional restructurings, and helping finance companies that deserves to be financed," he adds.
- The group plans to hire more to add to its 30-or-so headcount spread across New York, London, and Los Angeles.
Of note: Ellison has also been named Chief Innovation Officer of Corporate Finance, a role that tasks him with testing ways that technology such as A.I. could benefit Houlihan Lokey itself.
Context: The fintech industry is in the midst of a series of seismic shifts that could create a whole new class of winners — and a whole new set of deals.
- The Fed began hiking interest rates last year, tightening up financiers' purse strings but also forcing fintechs to rethink their business models that were created in a zero-interest environment.
- Silicon Valley Bank's failure simultaneously put a renewed focus on regulation (which may drive even more dealmaking in the regtech space), and also gave fintechs an opening to win business against the incumbents.
Background: Houlihan Lokey has worked on fintech deals in the past, though traditionally through its tech or financial institutions group. The creation of a consolidated group for fintech signals that the bank believes it is a growing category in the long term.
- Focused on mid-cap market, Houlihan has advised on fintech deals including the $300 million, TPG-led investment in Acorns; Thomas H. Lee's investment in Odessa; and Broadridge's $2.5 billion acquisition of Itiviti.
- The firm has also worked in the crypto space, recently representing DCG and Genesis creditors such as Gemini.
Bottom line: "The rounds that were happening last year were lots of SAFEs and CLAs. These, I call it the equity version of extending pretend," says Ellison. "Well, extend and pretend has come to an end."
