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Investment Banking
By Eddie Tobey
Investment banks, as opposed to commercial banks, assist public and private corporations in raising funds in the Capital Markets (both equity and debt), as well as in providing strategic advisory services for mergers, acquisitions and other types of financial transactions.
A key role of investment banks is to advise companies in raising money or funds. There are two ways of raising funds that investment bankers typically engage in: raising funds through the capital markets and raising funds through private placements. Investment bankers can raise funds in capital markets in two ways. They can sell the company's equities in the stock market in an initial public offering (IPO) or secondary offering, or they can give advices on debt issues to the companies. Investment bankers also advise companies on private placements, which mean purchase or sale of corporate securities by private companies or individuals. Types of private placement transactions include venture capital investments, strategic investments by companies, private equity investments, private debt placements, acquisitions, divestitures, and merchant banking.
Investment banks possess an extensive network of industry and financial contacts, current market knowledge, legal processes and comparable market events that will make their clients to create an edge to their competitors. Some of the major global public and private investment banks are ABN Amro, Banc of America Securities, Barclays Capital, Bear Stearns, BNP Paribas, Brown Brothers Harriman and Calyon.
About the Author
Eddie Tobey is a contributor to Banking-Web provides detailed information about banking, banking jobs, banking services, and more.