Investment banking is a type of banking that involves large, complex financial transactions such as mergers or initial public offering (IPO) underwriting. It pertains to certain activities of a financial services company or a corporate division that consist of advisory-based financial transactions on behalf of individuals, corporations, and governments. Investment banks provide underwriting services to help clients raise capital and complete mergers and acquisitions (M&As) . Here are some key points about investment banking:
- Investment banking deals primarily with raising money for companies, governments, and other entities.
- Investment banking activities include underwriting new debt and equity securities for all types of corporations.
- Investment banks will also facilitate mergers and acquisitions, reorganizations, and broker trades for both institutions and private investors.
- Investment bankers are experts who have their fingers on the pulse of the current investment climate. They help their clients navigate the complex world of high finance.
Investment banks may also provide ancillary services such as market making, trading of derivatives and equity securities, FICC services (fixed income instruments, currencies, and commodities) or research (macroeconomic, credit or equity research) . Most investment banks maintain prime brokerage and asset management departments in conjunction with their investment research businesses.
