Investment banking is the set of services provided by a financial institution for the creation of capital for other companies, governments or other entity. Investment banks provide a range of services, such as underwriting new debts and equity based security, as well as assistance in the sale of securities, mergers, acquisitions, reorganization of assets and brokering of trade. They may also provide advice on the issue and placement of stock.
Investment banks may operate as subsidiaries to larger banks or the banks may hire professional investment bankers who are experts in the field of economics, business or finance, and are up to date with the prevailing market environment.
In a broad sense, investment banking services are useful when large and complicated transactions are involved. They are able to analyze the accounts of the firm or other entity, tell how much it is worth, and give advice on restructuring a deal in cases of mergers, acquisitions or sales. They may also issue new securities as a means of raising money for a client firm and handle documentation required for the firm to go public for submission to the Securities Exchange Commission of the market.
Characteristics of a Reliable Investment Banking Professional
Listed below are some of the criteria your chosen investment banker should meet to best suit the needs of your business.
1. Experience: It takes skill and experience to build a network of contacts, work with buyers and sellers, complete the deal and obtain the highest possible values. Always choose a banker with considerable market reputation, credibility and experience of running a business.
2. Support Team associated with the Investment Banking Services provider. Large transactions require a whole team of researchers, marketing and public relations personnel, financial analysts, lawyers and economists. Larger, established operators are able to provide additional services as required.
3. As is the case with counsel, it is important that your investment banker has plans to meet your particular contingent needs and is responsive enough for you to be able to trust the people involved with your life's work. It is always wise to trust a financial institution that has such personnel as you can comfortably interact with.
4. Important financial deals have to be planned with forethought and followed through with patience. A dedicated investment banking services provider will have alternative plans to fall back on in case of interruptions or failures, as well as the tenacity to stick to the task in the face of increasing complexity and setbacks.