Investment banking is a type of bank that mainly deals with raising debt and equity capital (IPO), underwriting services, and equity sales & trading for corporations and other entities. Investment Bankers are financial advisors and act as middlemen between corporations and investors.
These financial institutions also assist in the sale of shares and help in mergers, acquisitions, and restructuring.
They fall under the category of Wholesale Banking Services or also called Merchant Banking
Article Highlights
- Key Characteristics, Fun Facts
- What Do Investment Bankers Do?
- o Equity Financing
- o Underwrtiting
- o M&A
- Type Of Clients They Serve
- How To Become An Investment Banker
- Fun Facts for Aspirants!Analysts who work at investment banks tend to spend up to 80-90 hours per week at the office (i.e., 16-18 hours a day)
- It is one of the highest paying jobs in the world of finance
- Bonuses can be higher than the annual salary if you are effective at your work
- Analysts are the best entry point if you want to become an investment banker
- All bulge bracket banks offer Analyst programs worldwide
What do Investment Bankers Do?
Investment Bankers are financial advisors and act as middlemen between corporations and investors. If a business needs capital and investors need to spend their money on profitable organizations, Investment Bankers merge these two ends by helping both parties.
Below are some of the major work Investment Bankers do:
- Equity Financing
- Corporations and PSUs try to raise capital by offering equity ownership in the market. It is one of the most cost-effective ways companies get a massive amount of funding. In that scenario, Investment bankers help corporations in preparing the prospectus for the listing of the shares. Investment bankers also take care of the regulators’ guidelines from time to time.
- Underwriting
Investment bankers also help corporations in underwriting. Underwriters collaborate with the corporations to determine the initial offering price of the securities, buy the securities from the corporation, and sell the securities to investors through its distribution network.
- M&A
M&A is usually a lengthy task involving multiple negotiations, planning, and following regulatory requirements. In that scenario, Investment Bankers play the role of an advisor so that the deal comes at a fair price.
Type of clients they serve
- Investment Banks serve a wide range of clients across the globe. Below we have penned down the most significant sectors in which investment banks help raise capital and perform M&A. Government
Investment Banks help governments build funding and trade shares.
- Institutions
Investment banks help Institutional investors trade securities by providing researched data.
- Corporations
Investment banks aid private and public organizations in getting IPOs, M&A, and restructuring.
How to Become an Investment Banker?
Generally, the profile of investment banking features a minimal requirement of a bachelor’s degree in economics, finance, business, accounting. Moreover, an MBA (preferably from Ivy League) would be an added advantage for the Associate position.
Investment banking market has experienced a tremendous growth globally, and is expected to maintain its dominance during the forecast period.
Several investment banks function on primary brokerage and wealth management facilities in coordination with their investment research enterprises.
In addition, investment bankers provide additional data for positioning their securities in the open market for companies, an operation which is very critical to the credibility of an investment banking.COVID-19 scenario analysis:Investment banking division has been significantly affected by the movement of workers to a work-from-home environment, thus creating major structural, institutional, and market difficulties.
In addition, decline in asset prices and big spikes in redemptions have also impacted institutional banking investing arms.Download PDF Sample for More Information: https://www.alliedmarketresearch.com/request-sample/7075Top impacting factors: Market Scenario Analysis, Trends, Drivers, and Impact Analysis:Increase in trend of growing capital requirements and rise in financial challenges in business environments, along with the surge in demand for fundamental advisory from corporate companies are key drivers for the market growth.
However, several factors such as government regulations and growth in cyber-attacks for data security are expected to hinder the market growth.Furthermore, improvement in business environments and increase in financial activity in emerging countries such as India and Singapore are expected to provide opportunities for the industry.The global investment banking trends are as follows:New technological advancements to flourish the market:Technology has changed the investment banking industry in recent years.
For instance, ING Group leverages AI's ability to enable bond traders to make quicker and more effective trading decisions, with the help of KATANA, an AI platform that applies predictive analytics to ensure that traders quote correct price while purchasing and selling bonds to their customers, based entirely on historical and real-time streaming of data.
