Investment banking is one of the most prestigious professions in the financial sector. It involves working with organisations to facilitate the financing of capital through investment, which is achieved through activities such as underwriting the issuance of stocks and bonds. Essentially, investment bankers are financial advisors to companies and, in some cases, to governments. They help their clients raise money.
This can mean issuing shares, issuing bonds, negotiating the acquisition of a rival company or arranging the sale of one's own company. Investment banking is a specific division of banking concerned with the creation of capital for other companies, governments and other entities. Investment banks play a key role in helping companies and government entities raise equity financing. As financial advisors to their clients, they help price capital, allocate resources and manage investments.
Although investment banks have been scrutinised and criticised from many different angles in recent years, they are virtually indispensable to the proper functioning of a free market economy. Hopefully this has helped you answer the question: "What do investment bankers do? Investment banking is a financial service provided by a banking division or finance company. It helps high net worth individuals, companies or governments raise or create capital. They underwrite new securities for all types of companies, assist in the sale of securities and arrange mergers and acquisitions or reorganisations.
To advise its clients, an investment bank needs to have a good sense of whether a company would be attractive to investors and whether the terms of a loan, bond or equity offering would be attractive to them. Not only are clients different, but the investment opportunities they seek are also different. Determining IPO share prices can be a complicated task, as the investment banker has to strike a delicate balance in setting an optimal price that provides the maximum funding for its client company while attracting the maximum number of investors. In theory, investment bankers should be experts who have their finger on the pulse of the current investment climate.
Know how to delegate As investment bankers move up the ladder, they need to find the right balance between doing and teaching those they work with how to do. It is not uncommon for investment banking analysts or associates toInvestment Banking Career PathInvestment Banking Career PathInvestment Banking Career PathInvestment Banking Career PathInvestment Banking Career PathInvestment Banking Career Path - plan your career path in IB. Admittedly, things can be a bit confusing, as virtually anyone working in an investment bank, apart from administrative support staff, often describes themselves as an "investment banker", regardless of their specific job title. An investment banker works in a financial institution or division of a large bank that raises capital for companies, governments and other entities.
When thinking about investment banking as a career, it is very important to recognise that with great remuneration comes great commitment. Investment bankers have been accused of pressuring analysts to rate securities favourably in order to please their clients and generate more investment banking business. When the company conducts an initial public offering (IPO), an investment banker buys a majority of the shares directly. For example, Goldman has sometimes offered its clients opportunities to invest in hot private technology companies well in advance of their IPOs.
If competition is particularly fierce, this can deal a substantial blow to the investment bank's bottom line.