What is investment banking?
Investment banking is the division of a bank or financial institution that provides underwriting
(capital raising) and mergers and acquisitions (M&A) advisory services to governments,
corporations, and institutions. Investment banks act as go-betweens for investors (people with
money to invest) and corporations (who require capital to grow and run their businesses). This
book will explain what investment banking is and what investment bankers do.
What are Investment Banks?
An investment bank and a bank’s investment banking division (IBD) can be confused at times.
Full-service investment banks provide a variety of services such as underwriting, mergers and
acquisitions, sales and trading, equity research, asset management, commercial banking, and
retail banking. A bank’s investment banking division only offers underwriting and M&A advisory
The following services are provided by full-service banks:
Capital raising and underwriting groups connect investors and companies
looking to raise capital or go public through the IPO process. This function serves the primary
market, also known as “new capital.”
Mergers and Acquisitions (M&A)
Advisory roles for both business buyers and sellers,
managing the M&A process from start to finish.
Sales and trading entails bringing together buyers and sellers of securities in the secondary
market. Investment banking sales and trading groups act as agents for clients and can also
trade the firm’s own capital.
The equity research group’s research, or “coverage,” of securities assists
investors in making investment decisions and facilitates stock trading.
Is the management of investments for a diverse group of investors,
including institutions and individuals, across a variety of investment styles.
Investment bankers advise a wide range of clients on capital raising and mergers and
acquisitions. These customers can be found all over the world.