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Investment Banking and Merchant Banking

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INVESTMENT BANKING

AND MERCHANT
BANKING
INVESTMENT BANKING
● An Investment Bank is a financial institution that raises capital,
trades securities and manages corporate mergers and
acquisitions.
● Investment banks profit from companies and governments by
raising money through issuing and selling securities in capital
markets (both equity, debt) and providing advice on transactions
such as mergers and acquisitions.
● A majority of investment banks offer strategic advisory services
for mergers, acquisitions, divestiture or other financial services for
clients, such as the trading of derivatives, fixed income, foreign
exchange, commodity, and equity securities.
INVESTMENT
BANKING

FRONT BACK
OFFICE OFFICE
MIDDLE
OFFICE
FRONT OFFICE
● Helping customers raise funds in the capital
markets.
● Advise on mergers and acquisitions.
● Buying and selling financial products with the goal
of making money.
● Researching industries, companies and products.
● Setting the terms and conditions for any form of
deal.
MIDDLE OFFICE
● These usually consists of traders, analysts, and
managers who are knowledgeable of trading
activities but usually don't engage in market
activities themselves.
● Another role is to ensure that the economic risks
are captured accurately (as per agreement of
commercial terms with client) and on time.
BACK OFFICE
● Making sure that the bank runs smoothly by
maintaining databases and check the day to day
operations.
● Every major investment banking has considerabe
amounts of in house software, created by the
technology team, who are also responsible for
computer and telecommunications based support.
PRIMARY MARKET SECONDARY MARKET
SERVICES SERVICES

RAISING CAPITAL SECURITIES BUSINESS

MERGERS AND ACQUISITIONS ASSET MANAGEMENT SERVICES

GENERAL ADVISORY SERVICES INVESTMENT ADVISORY OR


WEALTH MANAGEMENT
CAPITAL RAISING
The action to obtain money/funds in order to get the business off the
ground or help in the daily operations of the business such as the purchase
of materials and payment of wages etc. is known as capital raising.
There are usually two types of capital used by companies to fund all such
operations:
● Debt
● Equity.
Debt capital is usually raised by obtaining bank loans, personal loans,
credit cards or bonds etc. Equity capital, on the other hand, is raised by
selling shares of stock. Ideal capital raising skills, however, require
determining a mix of both these types such that it is most cost effective.

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