Investment Banking

What is an investment bank?

An investment bank is a financial institution that advises and raises money for companies

How do investment banks advise clients?

An investment bank offers strategic financial advise on how a company should structure a merger, acquisition, or IPO

How do investment banks raise money?

IBs act as an intermediary; they connect the company that wants money to those who have capital to invest.

What are the core investment banking activities

investment banking: where you have capital markets, products, and industry groups

sales and trading: where you sell and trade equity and debt

Research: where you research equity and debt

What is the function of the capital markets group?

This groups raises equity and debt

What are the product groups and what are their functions?

Products groups are groups such as M&A, LevFin, and Restructuring

What are the industry/coverage groups?

These are groups that cover specific industries such as TMT, Consumer and Retail, Healthcare, and do a lot more pitching

What is the Investment Banking heirarchy

From most senior to junior: MD, Director, VP, Associate, Analyst

What are the roles of an investment banker

The role of an investment banker is to raise capital, provide advisory services, perform valuation services, and put together presentations for clients

What are the roles of an IB analyst

the roles of an IB analyst are to do the bulk of the work preparing presentations and models

What is a pitch book?

A pitch book is basically any banking presentation that is used to pitch some type of material

What is included in a market overview / bank introduction pitch book?

Marketing material for the bank which is an overview of the bank and recent activity. This Includes:

-organization and products offered

-recent deals

-comparison against competition

What is included on deal pitches? (sell side -- a company wants to sell, why should they do it with you?)

1. Bank overview

2. positioning overview (comparison against banks)

3. valuation summary (how we value the company and why)

4. Potential buyers

5. Summary and recommendations

6. Appendix

What is included on deal pitches? (buy side -- a company wants to buy some company, why should they do it with you)

same as sell side except you are looking at potential acquisitions and may not have valuation information

What is included on debt financing/ IPO pitch books

same as buy/sell side deals except in IPO you may include what the company might IPO for and why, and for debt financing you will include the financing model

What is the Sell Side

The Sell Side refers primarily to the investment banking industry. Its main function is to help companies raise debt and equity capital, and then sell those securities to investors such as:

• Mutual funds

• Hedge funds

• Insurance companies

• Endowments

• Pension funds

What is the Buy Side

refers to institutional investors, or in simple terms, the investors who buy the securities.