Everything you need to know about Investment banking and how it functions
Have you ever wondered how companies manage to raise capital or funding for their businesses? Well, to execute these transactions a certain set of skills and expertise is required. From pricing, financial instruments that increases the revenues navigating regulatory requirements, etc. This is where investment banking comes in the picture.
Investment banking is a part of the banking operations that aids organizations or individuals to raise capital. They not only help raise capital but also help provide financial consultancy services. They act as intermediaries between the issuers and the investors and help them go public.
What is investment banking?
It is one of the most complex financial mechanism found in the world serving different purposes and entities. Besides this, they provide several types of financial services. Such examples include proprietary trading, trading securities, M&A (mergers and acquisitions), leveraged finance involving lending money to firms to help them purchase assets and settle acquisitions, etc.
Whether it is an M&A, or for companies looking to go public through an IPO, making a purchase of assets, or raising funds through different ways. The due diligence is taken care of by the investment bank. Some of the well-renowned investment banks are Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Credit Suisse, Barclays Capital, UBS, Bank of America, Merrill Lynch, etc.
Roles and functions of an investment banker
When it comes to the world of finance there are several roles and functions that an investment bank plays. Most of the functions include the underwriting of new stock issues, being responsible for mergers and acquisitions. It also acts as a financial adviser to several high profiles of private firms as well as government firms.
Besides underwriting, an investment banker also holds the responsibility of acting in the capacity of financial advisers for most of the clients. These expert professionals also provide suggestions and advices to corporations. Such suggestions and advice include topics on how one can make the company go public, raising the right amount of capital and many other financial aspects. Mergers and acquisitions are one of the biggest roles that the investment banker hold the responsibility of.
When it comes to evaluating the company financially, these are the kind of expert professionals the company requires.
While advising companies, and helping them raise funds and capital, an investment banking firm has highly diversified roles in terms of services they offer – trading and sales, asset management, research, securitized products, and wealth management.
A career in investment banking
Getting into investment banking is extremely challenging. There are more applicants than the positions available in the job market. But being able to get your hands-on skills and the latest insights in this field is an added advantage.
An ideal way for professionals looking to get into this field should sharpen their skills by taking up investment banking certification. An excellent professional from every field is aware of the importance of keeping their skills updated always. Perhaps this is one reason why most professionals these days are taking up credible certifications from esteemed certification bodies.