Investment Banking Entails

by VolvoDrive .

Investment banking is a particular banking division that solely deals in capital generation for the government, companies, and other entities. These services are offered by investment banks which underwrite the equity securities and new debt for any corporation, help them in the sale of securities, and facilitate of mergers and acquisitions, broker trades and reorganization for the institutions or private investors. They also provide advice on stock issuing and placement.
Core Investment Banking Activities
The main activities can be split into three: front office, back office, and middle office. The big companies offer all business lines – ‘buy side” and “sell side” – while the smaller companies focus mainly on sales, trading, and research. The role of the investment banks are:
1. Raising Capital and Security Underwriting
Investment banks act as middlemen between the buying public and the company that issues new securities. The bank evaluated the risk of trading the company’s securities and then determines their value. They also underwrite stocks using initial or subsequent public offering. The banks facilitate securities trading through the buying and selling of the same, profiting from the difference between the bidding and the asking price.
2. M&A Advisory and Corporate Reorganization
Investment banks often look to benefit from mergers and acquisitions due to the larger fee margins involved. The process involves strategic assessment of the possible transaction, negotiation and documentation, board of director’s approval, shareholder and regulatory filings, shareholders’ approval and finally closure of the merger.
3. Sales & Trading and Equity Research
Institutional investments rely on investment banking to trade securities. Match up the sellers and buyers on their account to facilitate the trading. They also provide equity research analysis, which is a function very essential in trading and sales of equity.
Other roles of investment banks include financial control, corporate strategy, risk management, corporate treasury among other functions.
About Martin Lustgarten
Martin Lustgarten is an investment banker based in Florida. He has worked in the investment banking industry for long, helping businesses define their goals and find a way to achieve them. He educates his clients personally on the values of taking particular investments and the value of securities.
Being a CEO, he has helped many clients in the investment endeavors in the different industries. He has a long and successful career in the financial sector. Besides his professional side of life, he loves traveling and is an accomplished juggler. He also has an active social media presence.