What Is an Investment Banking Advisor?

What Is an Investment Banking Advisor?

Investment Banking is a specialized financial service offered by a private investment bank or an investment banking company. It helps high-net-worth people, businesses, or governmental to raise or make capital from the financial resources of banking. They also arrange for the sale of securities, underwrite new issues for various categories of companies, help in the structuring of mergers and acquisitions, and reorganise or reconstruct companies.

An investment banking firm can be either a commercial lender or a savings and loan association. Commercial banks arrange for the funding of mergers and acquisitions, issue commercial paper, provide short-term cash loans and provide mortgage refinancing services to small businesses. They also undertake the management of inter-company debts, provide guaranteed financing for long-term facilities, and provide advice on merging with other firms. Savings and loans are specialized in providing low-term and short-term loans.

Investment banking can be dealt with by international investment banks such as International Monetary Fund, World Bank, and International Investment Banking Agency. They offer policies for raising and lending funds for buyouts, mergers, restructurings, and general restructuring of financial institutions, their employees, operations, and balance sheets. They also finance the development of countries and help in promoting trade. Their main functions are related to the provision of capital markets, financial instruments, policies for corporate credit, market evaluation, and foreign exchange rates.

Most of the investment banking firms are directly owned by their customers. The most common financial services that they provide are: cash advance and check advance, mortgage, commercial loans, post-dated checks, pay checks, money market, swap agreements, forward contracts, option trading, foreign exchange, swaption, and equities. They also provide a wide range of investment products such as bonds, equities, and entities. A few of the companies that specialize in financial services are Boston Stock Exchange, Merrill Lynch, Goldman Sachs, Salomon Smith Barney, Lehman Brothers, Morgan Stanley, JP Morgan, Credit Suisse First Boston, Deutsche Bank, Prudential Securities, and Wells Fargo.

Investment banking services are carried on by investment banking departments that manage, monitor, and control the activities of their investment banking business. The most common units in an investment banking department are treasury, investment banking, merchant banking, commercial banking, and mortgage banking. Treasury department manages and disburses the monies created by banks. They may use the money for short-term lending purposes and buy commercial or residential real estate. In merchant banking, commercial borrowers give loans to investment banking establishments and they repay them within a specified period of time.

The major activities of investment banking are: purchase, sale, inventory, and refinancing of commercial and residential real estate, purchasing international securities, providing investment advice to corporations on issues affecting their businesses, providing management services to corporations on behalf of their investors, providing assistance in complex financial transactions, conducting insurance cover, managing information technology systems related to their businesses, providing bank teller services, processing international banking transactions, providing settlement services to customers who have suffered financial losses, making loans to customers who secure their loans, conducting certain types of foreign exchange trades, providing credit guarantees, providing portfolio management systems to portfolios containing private and government bonds, participating in some private equity transactions, owning and controlling some publicly traded corporations, and buying and selling currencies. An investment banking advisor can work with a large number of clients at any one time. There are investment banking advisory firms that work with a number of banks. These firms offer investment banking advisory services to individuals and corporations.

The main task of investment bankers is to provide financial advisory services to a company or organization. They help the financial markets by organizing, promoting, and participating in financial activities of the clients. Investment bankers are often known as traders or brokers. They participate in day-to-day activities in the trading floors of stock exchanges and futures exchanges. The investment banks provide comprehensive research, economic forecasts, sector outlooks, global news and events, and forecasts for the future stock market. In addition, they help companies in mergers and acquisitions and buyouts, short sales and reports, and leveraged buyouts.

Although investment banking represents one of the most lucrative areas of commercial banking, it also involves some other important activities. Commercial real estate investment banking refers to the buying and selling of commercial property. Another area of investment banking is commodity and bond investment banking. There are also some specialized areas such as derivatives, cash management, global macro economics, mortgage banking, government finance, private placement, specialty banking, investment management, venture capital, and synthetic investment funds.