Learning about investment banking

59
rate or flag this page

By D Burns


Big League Investing

When people are looking for investments, be it property, stocks, commodities or other means of attaining wealth, they want good returns on their investment. Besides properties, some entrepeneurs want larger stakes. They want businesses to invest in. The development and selling of business is when you need investment banking. Rather than taking a rental property and improving it, these people invest in businesses, finding ways to improve them and make profits on them. Profits may come from the succesful operation of the business, its sale or even aquisition of some other business.

As with any kind of investing, one needs to know what they are getting in to. With investment banking, there are various levels or segments of investing. These various levels are for the various types or amounts of investing a person wishes to consider. When you are looking to invest millions of dollars, or make millions of dollars you need an investment banker.


Handling large investments is the stock and trade of investment bankers

Introduction to Investment Banking: Segmentation

In the Investment Banking industry, on the merger and acquisition advisory side, the prominent players you wouldfind relate to the segment of the market in which they provide services.These bankers each have areas of specialization. Some focus on energy companies,some on transportation, etc.

If you pick up the "Wall Street Journal" or watch "CNBC", you've probably heard of companies like Goldman Sachs and Morgan Stanley. They're considered the bulge bracket firms.They're providing merger and acquisition advisory services to the very large cap (large capitalization) companies on the New York Stock Exchange, companies like GE or Microsoft, to name a couple.These are the bankers who advise the largest companies on where to invest their funds.

Generally bankers working on these deals tend to"specialize" on certain types of industries and clients.They do a significant amount of important things for a buyer or seller. They can run an organized sales process. They find the best financing-well, at least until recently they could. Besides financing the investments, they also provide administrative help. They can serve as the CEO's or board's insurance policy against looking stupid or getting sued. For illustration, think about purchasing an investment property of apartment units. The investment banker would find a suitable apartment, help you finance the purchase and then assist with the administrative running of the operation in order to insure that it is making money and not getting sued.With investment banking, the services are on a larger scale, with larger headaches as well.

When investment bankers take a look at the mid market companies to purchase or sell, they tend to see regional firms that may have one or two offices to service them. This would be akin to purchasing a company with locations in several cities across a state or region The investment bankers that provide service to this level of the market are generally either regionally focused or focused on one particular industry, but do it coast to coast. Much like baseball scouts may specialize in a particular region or conference, these mid level bankers specialize in their region or speciality area.

Players in this space tend to be former bankers, commercial bankers,investment bankers who've decided not to work on the verylarge mega deals and are free to provide a "fuller spectrum" of support.

At the smaller end of the spectrum, below the middle market investment banks, you'll see large business brokers who tendto hire former real estate brokers or insurance agents often working their deals by posting ads on the internet. These bankers focus on purchasing and selling businesses in local communities or those with fewer locations.

Investment banking is not always the first thing that comes to mind when you think of investing, but it should. If you are wanting to make and handle large sums of money, one needs to think on a large scale. The whole idea of living large or thinking bigger is the area where investment bankers can help.

Comments

RSS for comments on this Hub

No comments yet.

Submit a Comment

Members and Guests

Sign in or sign up and post using a hubpages account.


optional


  • No HTML is allowed in comments, but URLs will be hyperlinked
  • Comments are not for promoting your hubs or other sites

working