What Exactly Is Investment Banking

By Margaret Green


Investment banks are not like typical banks in a sense that these are big institutions that would concentrate on special services meant for clients that are companies. When a company would like for these institutions, they are looking for a partner that can help them with finance related concerns with regard to their structure and their assets. So for those who are in charge of big companies and would need services like this, here is what investment banking is all about.

Now in general, companies are in need of partners that can help them navigate the financial landscape which can be rather complicated to do. It is because of this that one would need the experts to help them with planning and strategy making. There are several services that these kinds of banks would offer to their clients.

Now first of all, these banks would be in charge of underwriting for their clients. Now if a client would want to issue pubic securities and would need help on how to go about, they can seek advice from these banks. They will be advising the company on how they should position themselves so that they can be able to get the optimal profits for their securities.

Of course there would also be the case of corporate mergers as well as acquisitions wherein an investment bank may be able to help as well. Now whenever a company would merge with another or when a company will buy over another one, there are many things to take note of like the allocation of resources from the old to new and the shares. The advisor will handle this allocation and also help with the negotiations too.

Now another thing that they would do is that they would offer certain debts to firms. Basically they would lend money to companies so that they can fund the acquisitions and other kinds of activities that would involve the company. These high yielding debts are for companies that would need the extra funding in the event that they would need a big chunk of money for some of their activities.

Of course if one would want to restructure the company in order to create more profits in the future, these institutions may help as well. When one would say restructuring a company, he usually means auditing the assets, liabilities, and equity then fixing them according to the long term goals of the company. With these data, the banks may be able to help the companies when it comes to cutting off the necessary parts and focusing on other parts.

Before 1999, these kinds of banks would only offer special services meant for companies and firms that would need financial aiding. Nowadays, these kinds of banks would also offer the same services as commercial banks already. This is to help them be more competitive in the market because of the extra services that they offer.

For those who do not know what investment banks are and what their services are, here are some of the services that they offer. Of course these are only some of the services that they offer to the public. There are so many more things that these institutions would be able to offer to clients.




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