The concept of investment banking dates back to ancient times when merchants and traders would seek capital from wealthy individuals to finance their expeditions and businesses.

You should read last week’s newsletter for everything you need to know that happened across IB, AM, S&T, PE, HF & VC most recently.

IN THIS ARTICLE

• Raising Capital

• Mergers and Acquisitions

• Financial Advisory

• Underwriting Services

• Research and Analysis

• Client Relationship Management

• Negotiation and Deal Making

• Due Diligence

• Valuation Analysis

• Regulatory Compliance

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What Does An Investment Banker Actually Do?

Here's what they do explained in basic English:

An investment banker is like a financial matchmaker. They help companies raise money and advise on big financial decisions, like mergers and acquisitions.

The key roles of an investment banker include:

1. Raising Capital

Investment bankers help companies raise funds through various means like issuing stocks (equity) or selling bonds (debt).

They analyse the company's financials, structure the offering, and find suitable investors.

2. Mergers and Acquisitions (M&A)

Investment bankers advise companies on buying or merging with other businesses.

They assess the financials, negotiate deals, and handle complex transactions to ensure a smooth process.

3. Financial Advisory

They provide expert financial advice to clients, helping them make strategic decisions related to restructuring, divestitures, and capital allocation.

4. Underwriting Services

In IPOs (Initial Public Offerings) or bond issuances, investment bankers act as underwriters.

They purchase securities from the issuer and sell them to the public, taking on the risk of selling them at a profit.

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5. Research and Analysis

Investment bankers conduct in-depth market and industry research to identify investment opportunities, potential risks, and trends that can impact their clients.

6. Client Relationship Management

Building and maintaining strong relationships with clients is vital.

Investment bankers must understand their clients' needs, objectives, and risk tolerance to provide tailored financial solutions.

7. Negotiation and Deal Making

Investment bankers negotiate with clients, investors, and other parties involved in financial transactions to secure the best terms and outcomes for their clients.

8. Due Diligence

Before any major financial transaction, investment bankers perform due diligence.

They scrutinise the company's financials, legal issues, and other critical factors to assess its financial health and identify potential risks.

9. Valuation Analysis

Investment bankers assess the value of companies or assets, helping clients understand their worth in the market.

10. Regulatory Compliance

Staying up-to-date with financial regulations and ensuring compliance with relevant laws is crucial to avoid legal issues during financial transactions.

Overall, investment bankers act as financial experts and intermediaries, helping clients achieve their financial goals, make strategic decisions, and navigate the complexities of the financial markets.

Learn the above and you'll be miles ahead of other candidates when it comes to spring-week, internship and graduate scheme applications and interviews.

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Introduction To Investment Banking

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