Business portfolio of Investment Banks
Globally, Investment banks handle significant fund-based business of their own in the capital market along with their non-fund services portfolio which is offered to clients. However, these distinct segments are handles either on the same balance sheet or through subsidiaries and affiliates depending upon the regulatory requirements in the operating environment of each country.
All these activities are segmented across three broad platforms-equity market activity, debt market activity and merger and acquisitions. In addition, given the structure of the market there is also a segmentation based on whether a particular investment bank belongs to a banking parent or is a stand-alone pure investment bank.
Investment Banking encompasses wide areas of capital market based businesses and services and has a significant financial exposures to capital market.
Though investment banks also earn a significant component of their income from non-fund based activity, it is their capacity to support the clients with fund-based services, which distinguishes them from pure merchant banks. In US capital market, investment banks underwrite the issues or buy them outright (i.e.wholesale basis) and sell them later to retail investors thereby taking upon themselves significant financial exposure to client companies.
Besides, being such large financial power houses themselves, the global investment banks plays a major role as institutional investors in trading and having large holdings of capital market securities.
As a dealer, they take the positions and make a market for many securities both in equity and derivatives segments. They hold large inventories and therefore influences the direction of market. Goldman Sachs, Salomon Brothers, Merrill Lynch, Rothschild and others are significant market investors.
The global mergers and acquisitions business is very large. Investment bank plays a lead advisory role in this booming segment of financial advisory business. Besides, they come in as investors in management buy-outs and management buy-in transactions. On other occasions wherein investment banks manage private equity fund and they also represent their investors such buy-out deals.
Some investment banks in overseas markets also specialize in other segments such as management of hedge funds, bullion trade, commodity hedges, real estate and other exotic markets.
Globally, Investment banks handle significant fund-based business of their own in the capital market along with their non-fund services portfolio which is offered to clients. However, these distinct segments are handles either on the same balance sheet or through subsidiaries and affiliates depending upon the regulatory requirements in the operating environment of each country.
All these activities are segmented across three broad platforms-equity market activity, debt market activity and merger and acquisitions. In addition, given the structure of the market there is also a segmentation based on whether a particular investment bank belongs to a banking parent or is a stand-alone pure investment bank.
Investment Banking encompasses wide areas of capital market based businesses and services and has a significant financial exposures to capital market.
Though investment banks also earn a significant component of their income from non-fund based activity, it is their capacity to support the clients with fund-based services, which distinguishes them from pure merchant banks. In US capital market, investment banks underwrite the issues or buy them outright (i.e.wholesale basis) and sell them later to retail investors thereby taking upon themselves significant financial exposure to client companies.
Besides, being such large financial power houses themselves, the global investment banks plays a major role as institutional investors in trading and having large holdings of capital market securities.
As a dealer, they take the positions and make a market for many securities both in equity and derivatives segments. They hold large inventories and therefore influences the direction of market. Goldman Sachs, Salomon Brothers, Merrill Lynch, Rothschild and others are significant market investors.
The global mergers and acquisitions business is very large. Investment bank plays a lead advisory role in this booming segment of financial advisory business. Besides, they come in as investors in management buy-outs and management buy-in transactions. On other occasions wherein investment banks manage private equity fund and they also represent their investors such buy-out deals.
Some investment banks in overseas markets also specialize in other segments such as management of hedge funds, bullion trade, commodity hedges, real estate and other exotic markets.