Boutique banking firms are gaining ground thanks to a reputation problem bigger Wall Street firms are suffering after the financial crisis. The market share of the 10 largest firms, by fees, dropped to 36.3% last year, from 42.4% in 2007, according to data from Thomson Reuters. Boutique firms face their own challenges. Some struggle to pay their overhead; others depend on just a few rainmakers to bring in clients. Nonetheless, these firms are generating a good amount of industry interest, due in part to a strong sense of ethics. Three Ocean Partners, a boutique banking firm founded by David W. Knowlton in December, pitches clients on the promise of exclusivity, pledging to take just one account per industry. The pledge means missing out on lucrative assignments, but Knowlton says he is willing to give up some opportunities to build a long-term business. “We’ll have to turn down business, even if a bigger company comes along,” he said. “If we won both deals, it would breach what we stood for.”

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