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 when a company would be needing some financial advice on certain corporate activities of theirs, it would be best if they would get help of the experts. This is done so that they can do strategic planning as well as different financial planning for the future. Here are just a few services that these kinds of banks would provide.

First function of these kinds of banks would be underwriting and raising capital. Basically what these institutions would do is that they would help a company who would want to issue securities to the public. They would be the ones that would advise the company on how to position themselves for this endeavor and would also give them advice on how to go about here.

Now if a company would want to merge with another company or acquire a new company, then these institutions can definitely help with these kinds of things. Basically they would help with the advising of the sale and also the evaluation of the business that is to be merged with or to be bought over. They may also help with the negotiations for the client and to also help with the allocation of new shares.

Now another function that these banks would have would be to offer firms debts and some funding. Now this is often used by the firms when they would go through the acquisitions or mergers mentioned above and would need some cash on the other side. Of course these are very high yielding debts and would definitely be very helpful to firms who would need the boost.

Now for those who need restructuring advice for future goals, these banks may be able to help with that as well. When one would say restructuring, this means that a firm would fix the positioning of their assets, their debts, and their capital so that they can increase profits. Now these banks would help firms know where to put more emphasis in and also which parts to cut out to cut costs.

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.

So basically, these are just some of the things that these institutions would offer. Now there are definitely more things that these banks would offer. However, these are the primary ones and the most common services.

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