The precise definition says that investment banking is a special segment of banking, which helps individuals and even organizations to raise capital. The investment banking process is also about offering financial consultancy services to the client. There have been instances when investment bankers have played the role of intermediaries between a firm looking to raise capital from the equity markets and the end investor.
A look at the types of investment banking:
We have until now given a brief on the function of investment banking companies and let us now discuss the details. There is often confusion between an investment bank and an IBD. The latter term means investment banking division and this is just a segment of a complete bank. The functions for an IBD are limited but if it is a separate company then the functions of investment banking are broad-based.
A discussion about the functions of an investment banker:
The investment banking products on offer from companies, which do not carry the overhang of a bank, are varied. They certainly engage in the process of underwriting and capital raising and this is the primary job. However, there is more to expect, and investment banking firms operating beyond the control of a bank are known to deal in mergers and acquisitions. It is here the investment banker can operate in the capacity of an advisory for both the buyer and seller of the business.
They help to manage your assets:
The investment banking house can also perform security research to help investors. The equity markets offer great money, but you will need to invest wisely and the investment banking firm can do the research work for you. The research help of equities broadly implies a guidance role, which the investment banker performs and we would like to say that they help to manage your assets too.
A look at the types of investment banking firms:
We have somewhat discussed the function of an investment bank and let us now shift the topic to the various types of investment banking firms. There are basically three types of investment banks and the smallest is the regional boutique banks. This is the smallest in terms of general size and the capacity of dealing size. This form of investment bank operates with limited employees and can have offices in just one city. The services on offer are also limited here. There are the middle market banks, which are slightly bigger in size, employee strength. They can operate larger sized deals than the regional boutique banks. A perfect example of such an investment bank is KBW. Finally, there are bulge bracket banks and those are big names such as J.P Morgan and Credit Suisse. These investment banks have the infrastructure to operate at an international level.
An insight into the job profiles on offer in an investment bank:
There are some wonderful career prospects for anyone on the lookout for jobs at the investment banks. The investment banking salary structure is good and there are plenty of functions, which you can perform here. You can start as an analyst, associate, and slowly work up the corporate ladder similar to any other job.
This is a brief insight into the operations of an investment bank. We have discussed for you the types of investment banks and the functions, which you can expect from such a bank.