Investment banking is a part of business operations that is responsible for helping clients, both individuals, and organizations in raising capital. The investment banks provide financial consultancy services to clients in need. There are several things that an investment bank does for its customers;
- Raises capital and secure underwriting – an investment bank acts as the middlemen between an organization that is seeking to issues new securities and the buying public.
- The Investment banker also advises buyers and sellers on business valuation, negotiation and pricing. In mergers and acquisitions, the investment bank ensures that there is a well-structured transaction, the procedures and implementations are not flawed, and all requirements are met.
- The investment banker is also responsible for matching up buyers and sellers.
- An investment bank as from 1999, can venture into commercial banking up to a certain limit.
The Investment banking industry, however, is categorized in two lines of business. The sell-side and the buy-side. The sell-side in most cases deals with the trading of securities for money or other securities. The buy-side is responsible for advising organizations that are in the business of buying investment services. The types of buy-side include unit trusts, hedge funds among many others.
An investment bank can also be categorized in two other forms depending on its area of function. It can be split depending on private or public function. However, these two functions should remain as separate as possible. The private and public sides of this institution should not touch to avoid the exchange of information. The private areas deal with insider information that shouldn’t get to the public. However, the public areas are free for everyone and include sectors such as stock analysis.
Martin Lustgarten is an investment banker. He has one of the smartest minds in the industry. Lustgarten has decades of experience and has served clients across the globe. He has invested internationally and spread his wealth in several countries as a way of limiting risk and ensuring benefits from local growth. His experience and the ability to monitor the trends in the market guarantees the best results for his clients. Martin is considered a role model by many young investors.