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Tag: Investment banking course

Outrageously Simple Investment Banking Tips

Posted on by Imarticus Learning

 

Investment banking is a particular division of banking which is associated with capital making for enterprises, government, and bank support in compound financial transactions. In simple words, investment banking meaning pertains to a bank helping public and private companies gather funds in both the equity as well as debt capital markets. These investment banks were actually founded to raise the required capitals and also to offer guidance on different financial strategies for corporate sectors.

However, when you venture into the field of investment banking, the scenario may demand many strategies to be put in the right place to become successful. You may have taken many investment banking courses but the real battle begins when you actually start the job. This is the time when you actually realize completely what is investment banking?

Well, here are certain tips that can assist you in succeeding in the area. These tips will make the job easier for you and will definitely give you an edge over other candidates in the field.

Be Adaptable

As per Graham Ward, who has been the former head of equities at Goldman Sachs and is now at the post of adjunct professor of leadership at INSEAD, if you are aware of the kind of personalities that major financial institutions are looking at, you can ensure a long-term investment banking career for yourself. Moreover, you need to be a team player who understands all the requisites of investment banking. In addition, you need to be flexible enough to learn to adapt to the continuous changes in investment banking scenarios.

Persistence is the Key

Just understanding what is investment banking is not enough to be successful in the field. You need to be smart, with an added edge of possessing hard determination and a clear focus. Try to compensate for the area where you lack in brains with high levels of energy. In short, you need to be enthusiastic, energetic, dogged, and persistent to be successful.

Always be aware of the competition

A successful investment banker needs to continuously think of different ways in which he can add value during his or her interactions with the clients. This implies that you need to be informed about the different aspects of investment banking even more than the so-called investment banking experts. Read everything related to your specified coverage area as well as your clients. This requires extreme discipline and you need to go through your client company’s newsletters, reports and even about their shareholders. Also, try to read between the lines and make your own assessments about the company. Moreover, it will not be a drawback if you ask questions about what you do not understand about the said client company.

Taking career risks is imperative

Investment banking career path is not always a smooth one. The investment banking avenues neither stay in one location nor in just one sector. You as an investment banker need to take up the opportunities as they appear. You need to be open-minded and flexible enough to take up new investment banking opportunities. You can enroll in investment banking courses. This will help you understand the investment banking meaning in a better sense.

Consistency is the key

The job of an investment banker is not an easy one. As you rise up in position, the pressure increases. However, your consistency will help you in remaining cool minded when you reach a top position. Moreover, consistency will assist you in handling the huge amounts of revenues that you are expected to generate every year.

 Dressing Sense Makes a Major Impact

Though this sounds a little strange, it is a fact that being dressed properly makes an impact on your clients. It is also a common fact that many clients turn down the investment bankers who were dressed shabbily. Thus, it is highly imperative to be dressed properly when you are going for a deal.

A Look at The Top 5 Largest M&A Deals of All Time

Posted on by Imarticus Learning

Did you know that 2018 was globally the most happening year for deals in the capital markets and mergers or acquisitions in particular?
In investment banking circles, 2015 is remembered and used as a case study for two M and A deals. The deals of SABMiller PLC’s tie-up with Anheuser-Busch InBev worth 106 billion$ and the Allergan PLC tie-up with Pfizer Inc. for 160 billion$. Both deals are expected to be completed soon and are memorable because they comprise deals between rival forces merging. Both of these recently announced megadeals form giant conglomerates in their respective verticals.
Dealogic ranks M and A deals. According to their ratings, the top 5 deals of recorded times are as follows.

1. 1999 deal of Mannesmann being acquired by Vodafone AirTouch for USD 172 billion

This largest deal of all times was a cross-border, resisted hostile takeover. At that time Mannesmann was Germany’s number one wireless carrier and Vodaphone likewise Britain’s biggest wireless carrier. It was still the time of voice-only fixed lines and the sale of voice-only mobiles was not only popular but booming as well. Smartphones were in their infancy and Germany was definitely not a hostile takeover capital market.
Fighting the rivals for three months, Mannesmann tried for a merger deal with the French company Vivendi. Vodaphone struck back by forging a sweet deal with the French company. Once the writing was on the wall Mannesmann gave up as even the shareholders were in favor of the Vodaphone offer for a merger. Thus was born the world’s largest deal in investment banking and the biggest conglomerate mobile phone service provider.

2. 2015 deal of Allergan and Pfizer merger worth USD 160 billion

This deal is a unique case study where Allergan and Pfizer set about creating the planet’s biggest company in pharmaceuticals with Pfizer’s Celebrex and Viagra on the same selling platform as  Allergan’s Botox. The Pfizer move for inversion meant lowering of taxes as the US company could use the technique of inversion to claim incorporation in foreign countries with lower tax-rates while merging with Allegran who are Dublin-based. The US government termed unpatriotic such inversion moves and passed a bill to restrict such moves. However, the Allergan-Pfizer union could sidestep the rules since the acquiring company was indeed a foreign company.

3. 2013 deal of Verizon Wireless merging with Verizon Communication in a merger worth USD 130 billion

Vodafone was not the buyer but seller in this deal. Verizon Communications the U.S.-based giant in the telecom field bet big on broadband and cellphone services to buy the 45 percent stake it did not own from its JV partner Vodaphone, in a deal worth 130 billion$. Dealogic also ranks this the largest corporate bond issue in investment banking, because financing was through 49 billion $ in bonds by Verizon making Verizon Wireless today’s largest carrier with more than 137.5 million global customers for its wireless services.

4. 2015 deal of SABMiller acquisition by Anheuser-Busch InBev for USD 117 billion

The 117 billion$ worth merger of the two brewery giants created a giant union selling a close 33% of the global beer sales. Anheuser-Busch the Belgium-based renowned brewer found a willing sales merger partner in buying SABMiller who are U.K.-based brewers. SABMiller bargained its way to a great deal almost 50 percent higher than its closing price just a day before announcing the deal. This merger has stellar brands like Budweiser, Pilsner Urquell and Stella Artois from a 64 billion $ worth titan brewery today. The anti-trust approvals are still pending in many countries and when the deal fails, SABMiller will still receive the breakup fee of 3billion$.

5. 2003 deal of Time Warner’s acquisition by America Online in a marriage of sorts worth USD 112 billion

According to Bloomberg America Online’s purchase of Time Warner worth 112 billion$ could be famous as the 5th largest deal in history, and infamous as the worst corporate marriages in M and A global history. What was being touted as a synergetic marriage of new and old media giants, with Time Warner being the largest entertainment company and AOL being the pioneer of bringing internet to its customers, was doomed to a disastrous start. In just a few months the economy slumped with the bursting of .com bubble. The two companies were culturally too different to establish the promised progressive initiatives. Later that year AOL had accumulated losses of 99 billion $ which grew to 100 million$ plus in the next few years. The initial losses included charges that were reported at declining share values of AOL and in 2009 AOL was spun off by Time Warner amid huge shareholder losses.
Concluding notes:
An important investor lesson learned was that the mergers do not always yield benefits promised. Do an Investment Banking Course with Imarticus Learning to learn the nitty-gritty of M and A deals and exercise caution as a shareholder investor. All the best with M and A deals and your investment banking course!

The Evolution of Corporate Strategy From Budgeting in The 1950’s

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Learning all about how strategy in corporate is impacted by the budget vision, balance scorecards, goal weights, and such actions, is critical to succeeding in a highly competitive corporate environment. Such learnings should be explored about modern corporate ecosystems and are best achieved in the classroom mode of learning.
There are a number of factors that affect corporate strategy. In this article, we shall discuss the bare essentials of vision, budgets, the BSC and goal weights and how they impact competitive strategy.
Corporate Vision: 
Most corporate strategies do have a vision. Look at the functioning of Southwest Airline’s Herb Kelleher who had the foresight to bring flight prices on par with road travel. Working on his intuition and corporate strategy, the airlines evolved as the leading low-cost carrier. However, blinding vision can also overlook realities in the market place. Like the Enron case study where Jeffrey Skilling’s vision was to make it unstoppable because of its quantitative processes and securitization.
However, the concept was blinded to endemic problems and led to a significant financial drain. Similar to this was the idea of Jack Welch in corporate strategy that every business should either be number one or two in its category or be disbanded. The vision had a short life and was found faulty as success evaluation was very different from slotted classes.
Corporate strategy has evolved since the 1950s:
Great strategists in Indian history, since the first budget in the 1950s, were those leaders who personified the timeless corporate principles and could gauge the game a few moves ahead of the others. To them, there is no winning. Rather it is about finding newer challenges, gaining better skill sets and the resources to handle them all. In corporate strategy and especially in India, the corporate strategy since independence has been closely linked to the budget and its vision.

Competitive corporate strategy and Goal-weights:

Citing from a 2002- book by Professors Gary Latham and Edwin Locke who wrote extensively on corporate goal-setting based on their combined 70years of experience, competitive strategy goals should be defined as below.

  • Better performance comes from setting challenging goals.
  • More significant effort is generated from higher goals.
  • Rapid work is possible with tighter deadlines.
  • Personal commitments made public enhances the probability of succeeding.
  • Goal achievement is not impacted by who and how the goals are set.

Though this strategy seems simple and perfect many organizations follow policies that are in total opposition. Like strategies that indicate goals relatively as in cascading goals, the SMART goals and using percentage goal weights.
A SMART goal is ‘Specific’ and ‘Measurable’ while being ‘Attainable’ to the doer, ‘Realistic’ in quantitative terms and ‘Time-bound’ with specific deadlines. This method shows results when looking if goals are set and are specifically well-stated.
Cascading goals from the top downwards should never be limiting and rigid. They need to be in line with the goals of the executive team and individual goal setting.
The use of goal weights often proves counter-productive when one uses percentages. Instead, the best way is to indicate low, medium and high goals as the priority base.
Having looked at the various methods involved in goal-setting let us reiterate that while goal setting is of prime importance, there is no one way or technique to achieve goal success. Research by Latham and Locke point out that investing thought, effort and time into goal setting does payoff. One needs to be cautious with cascading management goals, avoid numerical and percentage weights and not blindly following the SMART test.

The Balanced Scorecard:

The BSC helps manage and implement corporate strategy within a time framework.  The BSC is a useful tool which links strategic objectives to the vision, measures initiatives, and targets, and balances financial measures with KPI indices. It applies across the organization and improves business performance. The technique was first advocated by Dr. David Norton and Dr. Robert Kaplan in the early 1990s and is accepted as being the theory.
Conclusion:
Concepts like the balanced scorecard, cascading goals, SMART goals and using percentage goal weights in goal setting are an integral part of corporate strategy. If this field interests you Imarticus Learning has some excellent courses in corporate strategy.
At Imarticus, it is essential to learn the best positive approach and test all theories. The assignments, case studies, and project portfolio are all practically oriented. The Investment Banking Courses also have modules in honing soft-skills and personality development coupled with assured placements and a well-accepted certification. So why wait any longer? Join today!

Deutsche Bank Loses $1.6 Billion on Bonds

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Deutsche Bank is amidst the world’s top 50 financial institutions with its investments in BNP Paribas, Allianz, AXA, China Construction Bank and Berkshire Hathaway.  The loss faced by Deutsche Bank in its complex municipal bond investment which amounts to $1.6 Billion is one of the historical losses in the banking industry to date. Embattled banking institute Deutsche bank had to face a rough path in its investment on bonds of insurance of Warren Buffet’s Berkshire Hathaway.  

The story started in 2017 as a giant investment deal

These losses are a result of $7.8 Billion municipal bonds bought back in 2007 by the leading global investment German Deutsche Bank. According to The Wall Street Journal, the German lender had bought default protection on the bonds which led to paying $140 Million in the following year for a transaction. This scandal about Deutsche Bank hogged the limelight after The Wall Street Journal came up with this breaking news. It is to be noted that the German lender had previously refused to accept the depreciating rates of these bonds for years which the markets had suggested brushing aside the concerns of financial agents. 

Arising conflicts within the German bank executives

Though it has been a decade after a disastrous investment like this, the Deutsche Bank has not come out clean with regard to its scope of loses on the municipal bonds. The piling of the loss may probably be due to the negligence of the Deutsche bank in recognizing the loses earlier and the conflicts between the executives of the bank regarding the decision to invest in Berkshire Hathaway.

Financial auditors had raised doubt regarding the capabilities of the Deutsche bank to withstand the future loses due to such municipal bond investments earlier. However, the German lender had ignored such concerns about those related derivatives. Finally, after almost a decade the Deutsche Bank decided to offload these municipal bonds. Since the senior executives refuse to restate the happenings regarding the bonds the internal investigations had come to a halt. 

Ultimately Deutsche bank had decided to sell the municipal bonds for Berkshire insurance for a loss of $1.6 Billion in 2016. The debate among bank executives included whether they should have explained clearly about the wrong-path in this investment. But, later chose not to restate it.

This story has not come to an end

The Deutsche Bank spokesperson explained that this investment was unwinded in 2016 as part of winding up non-core operations. After the interrogation of auditors and external lawyers about the municipal bonds, it was clear that it accounted in line with the rules and regulations. However other journals predict that this deal may have to face interrogations from the investors and the people concerned and that the Deutsche Bank can expect another storm any time soon. Deutsche Bank is also in the news for rumours about its Russian money laundering. The bad decision behind the investment led to the Deutsche Bank dragging the decision to finally sell it off at huge losses. 

What Is In The Store For The Indian Markets in 2019?

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In 2019, the current Prime Minister of India, Mr Narendra Modi is scheduled to submit his application and woo a billion individuals of India for a second run as the ruling government. While pole predictions are on the way and experts predict that Modi will undoubtedly succeed in his attempt, there is another major event in global history which is scheduled to happen.

In Mid 2018, the World Bank is set to release a global list of nations GDP from across the world. While this seems uninteresting at first sight, experts predict that India is set to overcome and become the 5th largest nation in the world surpassing the UK.

While this might seem to be a rare coincidence, we can confidently say that political parties will not let go of this opportunity to show off their might and skills. But since the results are yet to be announced, experts are predicting the outcome based on previous data.

According to the latest estimates by the World Bank, the GDP or Gross Domestic Product of India was 15 billion USD bigger than the French economy in 2017. As of now, India is only behind, United States of America (USA), China, Japan, Germany and United Kingdom (UK) in terms of its economy, but this year this might change for the better.

While both China and the USA are multi-trillion dollar economies, the India of today is only a 2.6 trillion USD economy. Right after the recession and depression of 2010 to 2017, the UK has only seen a 2 per cent growth in its economy, while India has seen a staggering 7.5 per cent. If the economy of India continues to grow at the same rate even this year, the predictions will come true, and India will surpass UK in its overall GDP.

Although the ruling party might contest a narrative around this news, but the fact still remains that the living standards of the UK are too high for the average Indian to catch. As of 2017, the average income of a UK resident was $42,515 whereas that of her Indian counterparts was only $1,964.

While India may surely surpass the UK in the race for becoming the 5th largest economy in the world, it will take her some years to overtake that of Germany. As of now, Germany is the fourth largest economy in the world, with the World Bank pegging her at 4.7 trillion US Dollars.

Another announcement that is scheduled to take place is that of India becoming the fastest growing economy in the world this year. With a projected growth of more than 7.3 per cent over the past couple of years and a GDP growth of 7.6 per cent in the first quarter of 2018 to 2019.

As per the statistics available with the Central Statistics Office(CSO), the average per capita of Indians have increased from Rs. 86,647/- in 2014-15 to Rs 112,835/- in 2017-18, recording a 30.2 percent growth from 2014-15 to 2017-18.

With all this being said, we can confidently predict that this will be a year of growth for India as a country of billions.

Round Up of Global & India M.A. in 2018

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2018 was a very eventful year for businesses across the globe and especially in India with mergers happening throughout the year and big names joining hands. The most significant of the many mergers and acquisitions that took place in India of 2018 have been processed for a long time and finally, in 2018 the deal was sealed and the mergers made official.
With that being said, in this article, we will take a closer look at all the mergers that took place and also talk about the most significant ones of the year. Let’s begin!
Flipkart and Walmart
We have all heard of Flipkart in India. Since its inception in 2007, Flipkart has become a household name for consumers across the nation for its deals, huge savings and especially Big Billion Day.
For the past couple of years, Flipkart had been struggling to keep their feet in the market after e-Commerce giant Amazon decided to step into the game and thus in 2018, Flipkart joined hands with one of the largest retailers in the world, Walmart. The deal between the giants was announced in May 2018, where Walmart will purchase a 77 per cent stake in the company. The deal which was finalized in August 2018 also included 2 billion USD in fresh funding to help Flipkart in its goal to become the biggest eCommerce retailer in India, surpassing Amazon.
Vodafone and Idea
In 2018 the Indian subsidiary of Vodafone Telecommunications Limited and Idea Telecommunications finally received a go-ahead on their merger from the National Company Law Tribunal or NCLT. The deal which was in works since last year finally was made public in August 2018, making it the biggest network with a subscriber base of 430 million. Companies representatives mentioned that this was a strategic move to fend off competitors like Airtel and Reliance Jio by holding a market stake of 37 per cent in the Indian Telecommunications space.
ONGC and HPCL
India is a country which is heavily dependent on Petroleum and natural gas produce. Both ONGC and HPCL are household names in the country and are the major suppliers of oil and natural gas to a country of millions. In January 2018, ONGC which is a partly owned Government organization announced its acquisition of 51 per cent stake in HPCL in an attempt to help the government meet its disinvestment target for 2017-2018.
ONGC shelled around 5.2 billion USD in its move to acquire a majority stake in the state-backed refinery, which was primarily funded by loans by debtors.
Tata Steel and Bhushan Steel
In May 2018, the steel conglomerate Tata submitted a winning bid of 4.2 billion USD to buy a 71 per cent stake in its bankrupt competitor Bhushan Steel. The announcement which got the approval of NCLT is a move to improve Tata’s domestic capacity and make inroads into the automotive steel, which was till now dominated by Bhushan Steel.
Conclusion
India is a fast-growing economy and thus the biggest mergers and acquisitions of 2018 have had a severe impact of growth on the economy of the country. Now in 2018, we are to see what new mergers and acquisitions take place.

What Transferable Skills and Personality Traits Are Needed For an Investment Banker?

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Financial careers are highly sought after because they can offer high payouts, and are exciting, high-pressure, nerve-wracking and demanding at the same time. That’s why an investment banker needs a very specific set of skills both tangible and intangible.

The banking sector job roles are customer oriented, and the most popular job role is that of the investment banker. An Investment banker is basically a broker as in the case of acquisitions and mergers, or between market and the firm like in IPO offerings, or within the firm itself like in maintaining the company’s finances.

Essential skills:

Besides the basic qualifications, the most crucial intangible skills for an investment banker are:

Proven intellect: Qualifications and an inherent liking for analytics, finances, economics, and mathematics help in job requirements and performance. Certifications from CFA- Chartered Financial Analyst and investment banking courses will in large measure help develop and whet the curiosity of an investment banker in finding solutions. A good understanding of physics, engineering, economics, computer skills, and many others will help your development.

Hardcore discipline: This trait is essential as an insider will know that it takes immense discipline to stay focused, work long hours and still be customer facing. Honesty, integrity and a lot of hard work go with the fantastic payouts you can expect in return. Discipline is quality that is largely inculcated through sports, doing additional studies like law, physical training, solving puzzles, and such activities. Remember that from your entry as an analyst to becoming the topmost director all roles work in an environment akin to a food processor and cooker. Develop those venting systems and stay focused on your daily goals.

Entrepreneurial skills: Innovation, creativity, excellent interpersonal skills are survival skills for this role. The way to approach tasks, find the right solutions and more importantly present them is a skill that is invaluable. Looking at solutions from all angles, having an open mind, and innovative thinking are traits to develop through case studies, further reading and diligent research.

Global: Knowledge of languages, a good understanding, and felicity towards cultural differences, broad-minded ability to handle situations and sensitivity to others will stand you in good stead globally. French, German, Mandarin, and English are popular languages to learn well. Your linguistic skills will also empower you in your role as an investment banker. Volunteering, disaster relief camps, foreign trips and such are great ways to build on these skills.

Building Relationships: Social skills, dressing appropriately, relationship-enhancing skills, and a healthy attitude that goodwill will aid you on the path to success. Customer acquisition and retention never happen by luck. You will need one or all of them on a daily basis, 24×7 to be able to clinch those deals and earn those fantastic brokerage fees and commissions.

Wrapping it up
The role is not an easy one. It is your drive and belief that will keep you focused as you move upwards. It is all about being on stage for much longer than you will ever expect. If you have these skills, very well! Learn more and acquire new ones as you retain the best.

How do investment banks operate?

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Let us understand a little about investment banks and their operations.

Definition of an Investment Bank.
Investment banks offer funding and advice to clients, corporates and other investors, trade, buy, finance, and sell services, commodities, and financial products to earn money for themselves and their customers. Retail banks offer loans and accept deposits from customers while keeping their money safe.

Modern days have seen banks called universal banks that include both retail and simple investment banking. Example: Barclay’s, Citi and so on. Boutique advisory services, pure investments only banks, and mid-market dealing banks are some other kinds of investment banks.

Who owns them?
 Leading US and European investment banks form public companies whose shares are traded on exchanges. The owners of shares own the bank. Some of the major investors are financial institutions, family holdings, bank directors, HNW individuals, government institutions, both private and public banks and investments banks.

Smaller financed investment banks may be partnership firms or privately owned companies.
Who are an investment bank’s main clients?

The main clients of investment banks are:

• Companies: From varied sectors fintech, energy, construction, retail, technology, healthcare, media, food, drinks, chemicals, organisations including financial services and such
• Funds: Are investment tools which pool assets of investors following an investment pattern and include pension funds, equity funds, and hedge funds
• Government: Semi-governmental institutions, export and credit agencies, wealth funds, and governmental funds
• Individuals with high assets: These are investors with surplus assets over1 million $
• Banks: Most banks protect themselves by investment activities, bank trading, and such to earn brokerage and profits for the bank

The main activities of an investment bank are:

 • Advisory: Clients are advised regarding selling, buying and IPOs of companies, raising money, the maintaining of financial affairs, trading of financial products and economic risk management
• Management of investments: Both individuals and corporations are advised on investment managing
• Providing loans and financing
• Trading: Trading of shares, derivatives, debt products, commodities etc. to earn brokerage
• Monitoring and research: Industry trends, economic developments, investment patterns etc. for clients and itself

How do they make money?
 Investment banks make money by offering these financial services to clients to earn income like

Fees: Advisory charges, finance, and short term funds, for providing loans, keeping money safe for clients, trading services, financing and arranging funds for its clients, research and reports, and investment services generate fees.
Dividends: Shares provide returns on investments.
Interest: Loans generate interest as income.
Investments: Brokerage and profits from making of investments.
Trading: Profits and brokerage made from selling and buying of securities.

What regulates such activity?
Besides government monitoring through regulators and monitoring agencies, the activities are regulated in these areas.
• Adequacy of capital: Banks have to maintain a cash-credit ratio, reserve funds and such.
• Activities undertaken: The operations of particular activities, regulations on operations, differentiation into various divisions, and such regulations prevent problems from spreading to healthy sectors.
• Trading for themselves is also regulated.
• Insider dealing: Prevents banks making unfair profits from client information
• Money laundering: Monitoring to ensure illegal parking of funds, launder money etc
• Transparency: Audits on banks and regulations to disclose their funds status, finances, and activities
• Payments to staff: Regulators scrutinize these to prevent excessive risk to the bank

Why does the economy need them?
 Investment banks are integral to the financial global ecosystem. They are crucial for the system and offer stability through their services like
• Providing businesses finance
• Advisory services
• Managing risks
• Providing research, strategy, and information
If you wish to learn more about investment, you can learn investment banking course. 

Also Read: What are the Best Investment Banks to Work For

Are Investment Bankers Able to Run Commercial Banking Operations?

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The answer to this question lies in understanding why commercial banking and investment banking have different roles to play in the banking sector. Commercial banking is customer-facing and deposit oriented. Investment banking, on the other hand, is similar to brokering deals between willing investors and companies that need investments and offer good growth. Your skill sets for each operation are different and may require different technological enablement.

Commercial banks:
 In a commercial bank, the deposit accepted from retail customers and the general public offer the banks a good investment capacity. Rather than hold on to the funds, banks invest in growing companies with guaranteed returns, government bonds and loans etc. When the income they earn from such investments is greater than what they pay their depositors as interest is higher the bank is successful.

Investment Banking:
 The investment banker is essentially a broker between the bank, the investors and finance-seeking clients, of investment services like IPO’s, asset management, mergers, underwriting, acquisitions, shares, trading, securities, and bonds. The brokerage earned from such financial transactions made on such advice is pure profit. There is no depositing of funds by the investors in the investment banking section. Investment banking is popular today to the large group of investors who have surplus cash and wish to earn well from it. Angel investors also seek the advice of investment bankers to study the markets, inform them of good investments and compute future gains and insights of ROI and many such advisory activities.

The two are completely different though they are a part of the same banking division. Can an arm be used in place of a leg? Well, that should let you infer how these two divisions function and are not interchangeable. A certain degree of compatibility will still exist from a career point of view. However, retraining is the only solution.

To learn more about such differences you could do courses recommended below when your goal is to make a career in banking and financial institutions and the services they can offer.

• Investment banking courses
• Financial modelling training
• Equity Research Courses
• Venture capital and private equity training
• Hedge funds training
• IFRS certification
• CFA certification
• Credit Risk modeling
• Trading in cryptos training
• VBA, Excel and Macros Courses
• Data Analytics Courses

Doing analytics or financial courses offer a good grasp of fundamentals, concepts, theoretical knowledge, practical skills and certifications that could help enhance your resume and career. They also offer boot camps, short term workshops, and basic knowledge of the technological skills like Excel, Macros, SAS, R, Java and so on. While certification definitely helps you need to be an excellent communicator and work diligently to acquire the best analytical and business skills. Another advantage in such courses is of mentoring by certified and experienced industry aces that helps garner the latest best practices, techniques, skills, and practice on the latest trending technologies in the fields of analytics and banking.

The payouts for investment bankers are far higher than in the commercial banking division. This having been said, do remember that it involves great interpersonal skills, a very specific set of technological skills, financial acumen and tireless work to be successful. A certified course on Investment Banking can definitely help enhance both your resume and career while allowing you to build that set of skills so essential to your job choices, career path, and payouts.

Even bankers can retrain themselves to broaden their fields and job opportunities considering the scope and high earnings of investment bankers. An ideal course for investment banker can equip you for the future. As long as money exists the scope for investment banking never dies down. Act on your choices today.

Also Read: How to Become an Investment Banker

What Is An Investment Bank?

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Believe it or not, even investment bankers find it difficult to describe what exactly investment banks do! This has to do with the sheer complexity and enormity of the financial transactions involved.

In simple words, an investment bank is an intermediary between organizations such as ABC Steel that need money and individuals and institutions that need to invest. Broadly speaking, an investment bank is an institution that:

– Helps organizations or governments to raise money by issuing and selling securities such as stocks and bonds

– Provides a range of advisory services on complex transactions such as mergers and acquisitions

– Offers a range of structured products and services to institutional and individual investors to help them manage their assets and wealth

Role of an Investment Bank

Investment banks could play different roles in a financial transaction. Some of the most common roles played by them are:

– Underwriter
– Principal Trader
– Broker or Agent
– Prime Broker
– Advisor

Underwriter

As an underwriter, an investment bank purchases all new securities of a company and resells them to the public. For example, ABC issues 20,000,000 shares for $10 each. An investment bank directly purchases all these shares from ABC and sells it to the public at a higher price, say $15 each. The investment bank also bears the cost of the sale.

Principal Trader

As a principal trader, an investment bank buys shares from other investment banks and investors and keeps them in its inventory. It may sell these shares at a higher price in the future. The term ‘principal trading’ simply means that the trader of securities is also its owner or principal.
For example, after ABC Steel’s shares are sold to the public, an investment bank may purchase some of these shares from the market. It may sell these shares later when the price rises.

Broker or Agent

As an agent or broker, an investment bank buys and sells securities on behalf of a company. The key here is that the investment bank does not own these securities. It only trades in them for a commission.
The important thing to remember here is that the brokerage or agency represents buyers or sellers who are the principals or owners of the securities.

Prime Broker

A prime broker offers a range of services to professional investors, including:
– Administrative and operational support for trading
– Lending of securities
– Management and safeguarding of securities
– Financing
Without a prime broker, it would be difficult for professional investors to trade with several different brokers and manage their cash and securities from one centralized account.

Advisor

Investment banks provide a range of advisory services on complex transactions such as mergers and acquisitions. They also advise companies on the different options to raise capital. They provide high net-worth individuals with customized wealth management services.
Learn about Careers in Investment Banking by attending one of our complimentary counseling sessions.