The activities of the investment banking organization outside of raising funds for the client are addressed within the following article.
It is true, the investment banking organization is instrumental, in properly raising capital for their respective clients, by way of advice and support. The preceding said, the investment banking company, also, provides its client-base with a number of other very significant services. In reality, the majority of primary banks operate on a basis that is truly diversified in the terms of the services they offer. The other services offered by an investment banking institution are detailed below:
The investment banking organizations, that are quite large, employ sizable research teams with the purpose in mind of gathering information about corporations. Other types of information attained, by such teams, are recommendations, generated, as to whether or not it makes sense to sell a particular company’s stock. The reporting is, generally, provided on an internal basis. The revenue that results is forthcoming, by way of selling stock to mutual fund managers or to hedge funds.
The major investment bankers have a trading department. It is the trading department’s objective to execute stock and bond transactions. The trading department is participating in the preceding activities, on behalf of the investment firm’s clientele.
Some of the investment banks, in prior years, have additionally made it a point to engage in proprietary trading. The preceding activity is where the participants, basically, put their own funds at risk, on particular securities. However, a recent regulation, referred to as the Volcker Rule, has made such an activity not very possible or probable.
The investment banking organization is involved in asset management activities. The major Wall Street Investment bankers are responsible for the management of giant-sized portfolios relating to pension funds; insurance organizations and foundations. The responsibilities, tied to asset management, within major investment banks, is carried out within asset management departments. Within the asset management department, expert individuals assist in the selection of combining the right mix of debt instruments, trusts as to real estate, stocks and other investment vehicles, with the objective, in mind, of attaining the financial goals of each of their clients.
The investment banking organization, too, involves itself in the activity of prosperity management or wealth management. This is to say, some of the banking organizations that perform services for Fortune 500 business entities, also serve standard investors. The team of financial advisors, of many of the investment banking organizations, work with families and individuals, in order that persons and familial units, may properly save for retirement. Additionally, other long-term financial requirements are addressed.
The investment banking organization, also, involves itself with that of secularized products. During current times, organizations may frequently pool their financial assets. Financial assets may range from credit card receivables to that of mortgages. The financial assets, mentioned, are then sold to investors, in the form of fixed income financial products. The investment banking organization will advise their respective clients as to proper opportunities, ripe in the way of securitizing income streams: assemblage of the assets and marketing them to particular institutional investors.
Many readers, may come to the conclusion, by now, that the terminology of investment bank is a bit misleading; considering all of the activities that an investment bank involves itself. It is correct to state, that many times, the raising of Capital or funds, is merely a portion of an operation that is much larger in scope.
In summation of the preceding text, investment banking operations are instrumental in assisting companies and governmental entities in arriving at wise financial decisions. The investment banking organization, also, plays a key role in raising capital outside of wealth management activities, which it participates, on behalf of its client.
Notes relative to Martin Lustgarten:
Martin Lustgarten is CEO of Lustgarten, Martin, a financial organization, founded by Mr. Lustgarten. Mr. Lustgarten resides, happily, inside the area of South, Florida with his family. He is a believer in international investment, and is a willing and a favorable role-model in creating wealth for the clients he serves.
Mr. Lustgarten enjoys a city environment. He appreciates the idea of the positive activity provided by the metropolitan environment. He is also is a collector of vintage timepieces; and is appreciative of most items of a vintage nature.