Investment banking is a specialized sector within the financial industry that deals with raising money for projects, offers guidance on complex financial matters, and facilitates trading financial instruments. In simple terms, investment banks act as intermediaries, connecting those seeking capital with those who have the funds to invest in their business ideas.
The main divisions in investment banking include:
- Capital markets focus on companies looking to raise capital by issuing equity or issuing debt. Facilitating initial public offerings (IPOs) stands out as one of the most popular services offered by this division.
- Advisory specializes in mergers & acquisitions and corporate restructuring, where corporate finance experts assist clients in undertaking M&A deals and restructuring procedures.
- Trading and brokerage deal with the buying and selling various financial instruments, such as equities, fixed-income securities, commodities, and derivatives.
- Asset management aims to generate returns for institutional investors like pension funds, investment companies, and high net-worth individuals. It’s a heterogeneous area, offering different risk-return investment opportunities to clients.
Our open-access course notes are an excellent resource for bankers, corporate executives, consultants, financial analysts, business analysts, and finance students.
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You can also download our free Excel templates on key financial topics, including Portfolio Risk, Capital Asset Pricing Model (CAPM), and Market-Capitalization Weighted Index.
