An investment bank is a unique
type of financial institution that aims to assist companies access capital
markets to raise money and look after other business needs. An investment bank
will take on in a few or all of the below-mentioned activities:
- Launching
new products or insure bonds
- Raise
debt capital
- Connect
in proprietary trading where teams of internal money managers trade or
invest the company's own money for its private account
- Raise
equity capital
Investment banks are frequently classified
into two camps, the sell-side and buy-side, but several offer both sell-side
and buy-side services. The sell-side usually refers to placing new bond issues,
selling shares of recently issued IPOs, assisting clients facilitate
transactions, or engaging in market-making services. On the other hand, the
buy-side works with mutual funds, pension funds, hedge funds, and the investing
public to assist them increase their returns when investing or trading in
securities such as bonds and stocks.
Several investment banks are classified
into three divisions, based on the services offered and the employees' tasks:
- Middle
office
- Front
office
- Back-office
According to the company, Joseph Stone Capital, investment banks
make most of their money assisting companies and governments raise money by
selling securities. But most important, the investment bankers act as middlemen
between sellers and buyers. Investment bankers not only assist the sellers
prepare securities to be sold, but also relate with prospective investors. One
of the great values provided by investment bankers to their customers selling
securities is their capability to look for buyers.
A company should consider its
need to approach carefully an investment banker to develop its
business. The size of capital being raised and
the market competition are the main factors to dwell on before
turning to the assistance of an investment banker. Moreover, new ventures should
be researched thoroughly before proceeding and therefore, the investment banker
has the necessary expertise in this.
Accordingly, the below-mentioned
are the benefits of taking assistance of an investment bank:
Ø An
assured raising of financial capital by underwriting or by acting as
an agent in the issuance of securities to arrange for sale, merger, or
acquisition.
Ø Effective
client handholding and handling about investing their money in other
companies to augment their value.
Ø Thorough
due diligence and investigation to make sure that its client’s deal
meets every compliance to reduce any failure loss or risk of invested
capital.
Joseph Stone Capital recommends customers in several area of
finance, investments, and sports management.
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