Contact Us
×

Tag: Investment Banking

What Are Some Good Questions to Ask an Investment Banker

Posted on by Imarticus Learning

Investment banking is one of the most lucrative career options. People who are eager to pursue a career in this field are often very curious about the day-to-day roles and responsibilities of an investment banker. The job has been popular ever since the capital markets started flourishing; the high pay and perks attract a lot of young people who try hard to make a successful career in this domain.

Your journey gets a little easier if you have someone to lead the way. This is true in professional aspects as well. The big question that people have in mind before opting for the investment banking industry is what is the best course of action to become an investment banker & how exactly to become an investment banker. Think about the job role & figure what are the best questions to ask an investment banker.

The best advice would come from someone who is already living your dream of becoming an investment banker. The investment industry is very dynamic and is evolving with the hour. There are a lot of grey areas that are not addressed in books and courses and require a more pragmatic approach to learning about the subject.

What questions to ask an investment banker?

What questions to ask an investment banker and what will be a good question vary greatly. It depends significantly on your motive behind starting the conversation and what you are looking to gain from it. You need to set your objective straight, whether you are looking to get a job or whether you are using the connection to build your network and make a connection.

The second important factor to keep in mind before considering questions to ask an investment banker is what stage of your career you are in. Are you a college student who wants to pursue higher education and then join the industry? Are you a working professional who is looking to switch to this industry, or do you just want to upgrade your skills and land a job as an investment banker? While asking your question, you should try to be as specific as possible and tailor it according to your requirements, any information that could be found online is probably not the best one to enquire about.

Here is a list of some interesting questions to ask an investment banker:

What type of investment banker are they?

When it comes to the important questions to ask an investment banker, this is one of the most important ones. Here is the answer-

In the investment banking industry, bankers are categorized into two groups: product group and industry. Some of the mainstream product groups include Initial Public Offerings (IPOs), Mergers and Acquisitions (M&A), Corporate restructuring, etc.

How to build and maintain long-term professional relationships with clients?

Working as an investment banker requires more than just industry knowledge and financial know-how. Your soft skills are equally important as your hard skills, and having good interpersonal skills is key to surviving within this industry.

What would you do differently to reach your present level?

If you are a beginner who is looking to learn from other’s mistakes, this question will certainly help you in your endeavors. It will help you to build the perfect road map for your dream job and will also help you avoid some common mistakes made by people in this industry.

What will be the impact of Artificial Intelligence in the Investment Banking Industry? There are talks of Robot Advisors, how will this impact growth and career prospects in the field?

AI has transformed various industries and has also helped automate many repetitive tasks that earlier required the human workforce. In the digital age, everything is run on data, and AI-powered Machine Learning techniques have already adapted human intelligence in some regards. There are driverless cars being made with the help of this technology, which might have a severe impact on the investment industry as well.

Why was your motivation behind choosing a career in this field?

This question would be fruitful if you want to know the investment banker on a more personal note and you want to listen to his inspiration and his point of view on the investment banking industry. It can help you develop a fresh perspective as to why you should join this industry.

What are some key skills that you look for in a candidate at your organization?

This question will help you understand the hard and soft skills needed to have a successful career in the industry. If you are interested in joining the particular organization, it will be very informative and insightful to crack the interview.

The above are the most important questions to ask an investment banker. Make sure that you confirm all the required details with them once you get some time with them. It’ll not only enhance your own knowledge but also prepare you for your potential future in this stream. 

A dedicated investment banking course can provide a valuable advantage for those looking to break into the field of investment banking. These courses equip you with the technical skills and financial modeling expertise that investment banks look for in candidates. They can also offer networking opportunities and help you better understand the industry culture. If you’re serious about launching your investment banking career, a course can be a strategic investment in your future.

What is the Starting Salary Of An Investment Banker In India[2023-24]?

Posted on by Imarticus Learning

Investment Banking is a high-profile job and investment banker salary is one of the highest in the finance industry. This lucrative job is challenging for a fresher due to the limited number of domains.

A course in investment banking can help you earn an attractive starting investment banker salary in India, though more is needed to compete with other high-profile jobs in the market. Yet, it is easier to climb the salary ladder once you have developed the required skills and proven competence in this demanding job.

Investment banking in India

Foreign banks dominated investment banking in India until the 1970s when an Indian bank entered the picture. Investment banking is a complex segment of the finance mechanism worldwide that provides various kinds of financial services.

Why is Investment Banker Salary in India High?

Because of this complexity and its crucial role in business success and corporate profits, handling such services requires specialized skills.

Not only does it need skills, but extreme knowledge of the field to understand the changes and the ability to make rapid decisions as well.

Such demands in the banking and finance sectors opened up the way for a list of job roles such as investment banker or financial analyst. As the job has a complex nature, it’s clear why is investment banker salary so high.

The starting salary

Investment banking jobs offer not just a salary but also bonuses and other incentives according to performance. Effectively, the starting investment Banker salary in India could be anywhere between 2.5-4L per annum.

This salary can grow faster if an MBA degree or other additional degrees or certification courses are added to upgrade the skills. Moreover, experience also matters and holds a higher value in determining the onward investment Banker salary. It is also an opportunity for more leadership roles and quicker promotions.

At the same time, the job has its share of cons, such as being stressed with longer working hours, being vulnerable to market trends, and having fewer opportunities for a quality life away from work. But in the long run, all of these are easily rectified with a better investment Banker salary.

Investment Banking Course

How to make a career in investment banking?

The bare minimum qualification to be a banker is a degree in commerce, finance, or economics. An MBA in finance, degrees such as CA, programs such as Chartered Finance Analyst, or anyone who has undergone an investment banking course in India is also eligible for this job. The more degrees or certifications, the more attractive the profile would be.

In addition, more expertise in mathematical and analytical skills, along with knowledge of Excel and PowerPoint, will help. Having an idea about the Financial Model is also needed, as that gives extra points to the resume. As mentioned, these added skills lead to a better investment Banker salary, even if it is entry-level. There is no single investment banking course to prepare for the list of job roles; instead, there are several certifications and programs to train candidates on the right path and beyond in their careers.

Conclusion

Completing an investment banking course is the beginning of the road to this career. It will provide eligibility for the first step, which is an internship to get hands-on experience. Post that, getting into a leading company as an analyst will open up the door to a lucrative career. Though the courses and certifications would only add to the prospects, the key to a successful career is a natural aptitude for finance and mathematics with an analytical mind can be a banker. One may just need a slight push in the right direction.

How Do I Get Into Investment Banking?

Posted on by Imarticus Learning

How Do I Get Into Investment Banking?

There’s no doubt that figuring out how to get into investment banking is hard, primarily because it is the most prestigious job in the financial services industry. Traditionally, companies hire from elite universities and colleges for their entry-level positions, but things are changing as banks understand the need for diversity and different backgrounds. Here are some of the usual, and unusual paths, to an Investment Banking career and some tips on how to secure that lucrative job.

Entry Level Analyst Investment Banking Opportunity

This is when you join an Investment Bank after finishing your undergraduate degree. Most Bulge Bracket investment banks will take part in the placement rounds at various colleges. The problem with this approach is that unless you go to these colleges being part of these placement rounds is quite tough, especially since many boutique banks do not hire in large numbers.

If you are exploring how to get into investment banking, even if you are not part of a college where an investment bank comes to hire, nothing stops you from sending in your resume. And if that doesn’t work, you should consider joining a large financial institution in a different role, like corporate banking or even a brokerage firm. This work experience will set you up for a good MBA, which can then help you secure a job in the field.

Entry Level Associate Investment banking Opportunity

One of the most popular ways to consider how to get into investment banking is by joining them as an associate after a few years of experience and an MBA with a specialization in Finance. The great part about this route is that even if you didn’t go to an Ivy League college, your MBA will now stand you in good stead since most Investment Banks prefer this route over most. Most bulge bracket and boutique banks are part of placement rounds in well-recognized MBA schools globally and in India.

Lateral Roles Investment Banking Opportunity

While the bulk of Investment Banking roles get filled at Associate level through MBA placements, many roles are filled via lateral movements from different professions in various industries.

  • Lateral move from industry: Finance professionals working in the corporate field and contemplating how to get into investment banking can often join an investment bank a few years into their career by bringing their sector and domain expertise to the job. This works especially well in boutique investment banks that specialise in verticals like Pharma, Consumer goods, E-commerce, etc., and require extensive domain expertise to help secure clients.
  • Lateral move from other areas: Finance professionals from the Private Equity field sometimes move to Investment banking, even though the reverse is more common. However, there are instances where corporate bankers with excellent client relationships figure out how to get into investment banking and manage to get a foothold in the firm’s Investment Banking unit.

Corporate Investment Banking Unit

Many aspirants tend to forget about the route of how to get into investment banking, but if it is experience and role that’s important, this is perhaps as good as working in an Investment Bank for responsibilities and roles without having to do business development or secure clients. The caveat lies in the fact that it is a support function and perhaps won’t have the dynamism and scope of working on the sell side since you will be restricted by your firm’s corporate strategy and the sectors your company wants to focus on investing in. While salaries are good, they might not be on par with working in a pure-play Investment Bank.

As you can see there are many Investment Banking Opportunities, it is all a question of being prepared when the opportunity comes knocking at your door. As they say, luck is nothing but preparation meeting opportunity.

Related Article: How to Become an Investment Banker

Merger and Acquisition: Key Differences

Posted on by Imarticus Learning

Have you ever wondered how successful companies expand, diversify, and stay ahead in the competitive business world? It’s like watching a dance performance where every move matters and the stakes are incredibly high.

Today, we invite you to step into corporate choreography and ask yourself: “When it comes to business growth, which dance is the real showstopper – the graceful waltz of a merger or the commanding tango of an acquisition?”

In the grand theater of commerce, mergers and acquisitions take center stage. But what is the key difference between merger and acquisition? Why do some companies choose one over the other? How do these strategic moves impact the corporate landscape?

The ownership of corporations, business organizations, or their operating units may be transferred to or merged with another firm or business organization through commercial transactions known as mergers and acquisitions (M&A).

Understanding difference between Merger and Acquisition

What is Merger?

A merger is like two dance partners creating a harmonious duet. In the business context, two separate companies join forces and become one.

From a legal standpoint, a merger is akin to a grand metamorphosis where two companies come together, shedding their old identities to birth a brand-new entity with fresh ownership and management structures, often featuring key members from each original firm. It’s like a chrysalis turning into a vibrant butterfly but in the corporate world.

Different types of Mergers often take the stage to reduce the heavy cost curtains, expand the storyline into new markets, and skyrocket revenue and profits. Think of it as two adventurers deciding to combine their treasure maps for a more fruitful quest.

What is the purpose of mergers in business?

Now, let’s talk about the real theater of business – the examples of Mergers and Acquisitions, the friendly versus hostile takeover drama. In the spotlight, we have various types of mergers, akin to a well-choreographed ballet, and several types of acquisition that are hostile, more like a suspenseful thriller. The critical factor to recognize the difference between merger and acquisition is whether the deal is sealed with a warm handshake (merger) or a clenched fist (acquisition).

In the enchanting realm of friendly mergers, cash isn’t the show’s star; it’s more about exchanging power and vision. However, it’s a rare spectacle to witness. Picture two CEOs, each with their kingdom, willingly deciding to share the throne for the greater good. When this celestial alignment occurs, both companies perform a magic act – their existing stocks vanish like a puff of smoke, and from the haze emerges a shiny new stock bearing the name of their newfound corporate identity.

So, in the captivating drama of corporate metamorphosis, mergers are the elegant ballet dancers, gracefully twirling to reduce costs and expand their horizons while preserving their individuality.

Both companies usually share their resources, including assets, employees, and technologies, during a merger to create a stronger, more competitive entity. It’s a strategic move aimed at enhancing market presence, expanding product lines, or streamlining operations.

What is Acquisition?

The difference between merger and acquisition is that, Acquisition, is more like a solo performance. In this scenario, one company takes the lead and acquires another. It’s akin to a dance where one partner dominates the floor, guiding the other through the motions.

There are different types of acquisition wherein the acquiring company absorbs the acquired one during an acquisition, usually incorporating it into its existing structure. This can lead to significant changes for the acquired company, including new management, branding, and operational procedures.

Who are the key players in the acquisition process?

Buyer: The party that is acquiring the target company. The buyer’s management team will be responsible for acquiring the target, negotiating the deal terms, and integrating the target into their organization.

Seller: The party that is selling the target company. The seller’s management team will be responsible for preparing the target for sale, negotiating the deal terms, and transferring ownership of the target to the buyer.

Investment bankers: Investment bankers act as financial advisors to the buyer or seller. They help structure the deal, raise financing, and negotiate the transaction terms.

Lawyers: Lawyers provide legal counsel to the buyer, seller, and other parties involved in the acquisition process. They help draft and negotiate the legal documents and ensure the deal complies with all applicable laws and regulations.

Accountants: Accountants provide the buyer and seller with financial analysis and due diligence services. They help assess the target company’s financial health and identify potential risks or liabilities.

Valuation experts: Valuation experts independently assess the target company’s value. The buyer and seller use this information to negotiate the purchase price.

Advisors: Other advisors, such as tax and human resources advisors, may also be involved in the acquisition process.

Investment Banking Course

Difference between Merger and Acquisition

There are many examples of Mergers and Acquisitions, including horizontal mergers, vertical mergers, and conglomerate mergers. Each type of merger or acquisition serves different strategic goals and presents unique challenges. The choice of which type to pursue depends on the companies’ objectives, industry dynamics, and market conditions.

Now, let’s examine the key difference between merger and acquisition business moves:

Nature of Collaboration

Mergers: Collaboration is the name of the game. It’s a partnership where both companies work together, often with equal say in decisions.

Acquisitions: This is more of a takeover. One company dominates the other; the acquired company usually has less say.

Identity

Mergers: Both companies retain their identities, often resulting in a blended name or branding.

Acquisitions: The acquired company’s identity is often subsumed by the acquiring company, with the possibility of rebranding.

Control

Mergers: Decision-making is shared, reflecting a sense of equality between the merging entities.

Acquisitions: Control rests largely with the acquiring company, dictating the future of the acquired one.

Purpose

Mergers: Typically, the goal is to create a stronger, more competitive entity through synergy.

Acquisitions: The aim is to gain control, expand market share, or eliminate competition.

Cultural Impact

Mergers: Cultural integration often ensures a harmonious blend of values and practices.

Acquisitions: Cultural differences may be less prioritized, potentially leading to clashes.

Unveiling the M&A Trends 

The Tech Revolution Continues to Reign Supreme

In the M&A arena, technology remains the undisputed monarch. We witness the digital realm expanding its reach each year. Companies will continue to seek tech-driven mergers to bolster their digital portfolios. Whether it’s AI, cybersecurity, or the metaverse, expect M&A deals that make headlines and reshape entire industries.

Sustainability: The Green Handshake of the Future

In a world increasingly concerned about its ecological footprint, sustainable M&A is set to take center stage. Businesses are recognizing the importance of environmental, social, and governance (ESG) factors. The mergers of tomorrow will be defined not only by profit margins but by their commitment to sustainable practices. Think of it as a “green handshake” where both parties pledge to leave a positive impact on the planet.

Health and Wellness: A Healthy Appetite for Deals

The pandemic has accelerated the adoption of digital health solutions and heightened our awareness of overall well-being. We anticipate a surge in M&A activity within the health and wellness sector. Companies will vie to provide holistic health solutions, from telemedicine to mental health support, to cater to the growing demand for personal care.

The Creative Economy Takes Center Stage

The creative economy will flourish as the world embraces remote work and digital collaboration. Expect M&A trends to reflect this shift, with businesses looking to acquire creative talents, agencies, and content creators. Fusing creativity and technology will lead to groundbreaking innovations and artistic collaborations.

The difference between merger and acquisition landscape promises to be an enthralling spectacle of innovation, sustainability, and global collaboration. Each deal will be a chapter in the evolving story of corporate evolution, where businesses, like seasoned dancers, adapt to the rhythm of a changing world. The stage is set, the actors are ready, and the audience, the global business community, eagerly awaits the unfolding drama of M&A.

The Final Words

In business, the difference between merger and acquisition is their two distinct dances, each with its rhythm and style. A merger is like a graceful waltz, where two partners come together as equals, blending their strengths to create something beautiful. On the other hand, an acquisition is akin to a commanding tango, where one partner takes the lead and guides the other through the steps.

Understanding the difference between merger and acquisition corporate moves is essential for businesses looking to embark on such journeys. Whether you opt for the harmonious waltz of a merger or the commanding tango of an acquisition, both can lead to growth and success when executed with precision and purpose.

The Certified Investment Banking Operations Professional (CIBOP), is Imarticus Learning’s premier investment banking certification program tailored for aspiring professionals with under three years of experience. This immersive 150-hour program is your key to unlocking a rewarding career in investment banking operations. Enrolling in CIBOP comes with the added benefit of 100% job assurance, ensuring you access to ten exclusive job interviews with our extensive network of over 500 esteemed partner organizations actively seeking skilled investment banking professionals.

So, the next time you hear about a merger or acquisition in the business world, envision it as a captivating dance where companies move in sync to the rhythm of opportunity and transformation.

A Complete Guide on : Certified Investment Banking Operations Professional(CIBOP)!

Posted on by Imarticus Learning

Does the word Operations conjure images of men in overalls with spanners or perhaps logistics?
To understand what we mean by ‘Operations’ go here. In this post, we give you some insight into how the program is different.

CIBOP has been created in conjunction with industry experts to ensure a syllabus that is relevant, timely, and interesting. In a short duration of 4 months, want to make sure that you have an in-depth knowledge of global investment banking and capital markets.

Our CIBOP course (Certified Investment Banking Operations Professional) is specially designed for candidates who are looking forward to building a career in the field of Operations which includes the Treasury & Clearing divisions in an Investment Bank.

This program will also have a whole host of guest lecturers that will provide students ample opportunities to interact with experienced senior professionals. You can ask questions, clarify doubts and get a glimpse into the career path you are embarking on. In a few months, you will probably be working with some of them!

The operations training program perfectly complements our personal development program (https://imarticus.org/certified-investment-banking-operations-program/) which ensures that you are well prepared for the corporate world.

We offer the industry-endorsed CIBOP certification and the CISI certified IOC (Investment Operations Certificate) on successful completion of this program. These well-recognized certifications will equip you for a worthwhile career within Investment Banking.

Your learning in Operations will include an all-inclusive exposure to trade lifecycle processes in the areas of derivatives and securities with a truly global outlook. Additionally, you will gain an in-depth understanding of each product and its workings from an operations perspective.

Please don’t hesitate to contact us if you have any questions. Call us on 81086 00055 or fill up a form here and we will get back to you.

About Imarticus
Imarticus Learning has been formed to bridge the gap between academia and the industry by providing knowledge and skill sets that are vital in today’s competitive working environment. ‘Marticus’ means knowledge and the ‘I’ stands for India, therefore Imarticus. We offer comprehensive industry specific training programs in various sectors such as financial services, healthcare, and logistics.

What is the Scope of Investment Banking in the Future?

Posted on by Imarticus Learning

The scope of investment banking is remarkable. But, due to recent economic shifts, the investment banking industry has faced significant challenges. Following the Covid 19 crisis, banks experienced critical changes in financial regulations and client expectations. They have also witnessed a change in working models, technological advancements, and market democratisation. 

More than 30% of private and public sector banks in the economy today have a horde of NPAs (non-performing assets). This also run into quite a loss of a few thousand crores. With such significant changes, it is crucial to look at the future scope and trends of investment banking.

Trends in investment banking

Let’s look at the trends in investment banking in 2022.

The consumer is the king

Banks have realised that putting customers first can reap significant benefits. Customer satisfaction is essential to their success. As a result, banks are experimenting with new methods and tools to respond to customer inquiries. In addition, they are focusing on resolving customer complaints fast and increasing customer satisfaction. Basically, they are treating their consumers as kings.

Investing in Big Data

Banks are using master data management and data lakes to use their massive amounts of data. Furthermore, they are investing in big data and hiring a workforce that is well-versed in technology and skills. Banks believe that data becomes a valuable mining resource for discovering client insights. It is also helpful in developing new market strategies and launching new products when modern data analysis tools are used.

Using Artificial Intelligence and Machine Learning

Banks are increasingly relying on the power of artificial intelligence to predict data, launch new products, and close deals more quickly. AI accelerates data processing, automates essential but critical processes, forecasts real-time trends, and so on. That’s why banks are allocating budgets to use artificial intelligence and machine learning.

Using Marketing Strategies

Firms and banks are focusing on marketing their new and existing products. With the most recent marketing tools and strategies, they can cover their losses incurred during the pandemic and increase overall profit. In addition, they are using the most recent marketing software and CRM to increase customer satisfaction and popularity.

Scope of investment banking in future

Banking will look very different in the future. As a result, banks must prepare to face changing consumer expectations, emerging technologies, and new business models. That is why the banks need to start putting strategies in place now to help them prepare for banking in the future. 

After analysis of the current scenario, it is certain that the field of investment banking has a great scope in the future. But the prerequisite for the same is a lot of rules and regulations. Their implementation and follow are much required.

Safeguard Banks

It is crucial mainly that the big guns of the industry can strengthen the foundation of the banks well enough to prevent them from being affected by anything in the future.

The President and CEO of the Federal Reserve Bank in America brought the world’s attention to the fact that it was essential to ensure that none of the banks ever get big enough to fail. But as we can see, especially in our present economic conditions, many banks in India are so big that if they ever forget, there would be grave economic chaos.

Strategies to prevent bankruptcy

There is a general consensus in the global economy that banks are required to be put under scrutiny much more often than they are present. As a result, the governments have begun to brainstorm various schemes and initiatives which would prevent the banks from actually going bankrupt.

Strengthening Banks

The Financial Regulation Depositors Insurance Bill is one such bill that has been passed in the form of a radical change to strengthen banks well enough to not face any damage due to an impending economic slowdown.

While some are trying their best to bring in and develop various mechanisms for developing and strengthening banks, some feel the need for the economy to do away with investment banks altogether. These people justify their statements by saying that such banks only exist for a few people’s benefit and not for the whole society.

Conclusion

But the economy is growing in proportion to the growth of the population worldwide. In such a scenario, it is essential for investment banks to evolve enough to serve the economy and society. Therefore, while there is immense scope for the investment banking sector in the future. Professionally trained and skilled individuals are in demand in investment banking.

Also Read: Career and Scope of Investment Banking In India

Role of Technology in Investment Banking

Posted on by Imarticus Learning

Today, technology is key in turning trading strategy into trading profit. Technology enables new pricing models and products to be delivered to the market. The Investment Banking industry thrives on the flow, analysis, and interpretation of information and technology is often the edge that gives a bank a competitive advantage.

Technology spans across  Investment Banking  functions and underpins every deal that is made. When a system is unavailable, millions of dollars can be lost. So robust systems and infrastructure are more than important, they are fundamental to IB’s ability to operate & make profits.
Another challenge is the evolving regulatory burden of the financial sector. Technology has to do more than keeping up; it has to drive the changes and developments necessary to keep IB’s ahead of the competition.
IB’s rely on advanced technologies in the front office to enable high-speed and high-frequency trading. Until now, the upfront benefits from this activity have been so enormous that the complexity and inefficiency of post-trade processes and systems have often been overlooked.
This is changing at a fast pace. The highest performing investment banks are now using their front-office technologies in bold, innovative ways as a source of competitive advantage for the whole business. By concurrently enabling interdependent business functions, such as risk management, settlement and financial reporting, these technologies are transforming the way organizations ‘think’, ‘react’ and ‘operate’.

There are a number of reasons for the change in this trend:

  • Management requires integrated, proactive technology infrastructures that can anticipate the impact of new market and regulatory developments and adapt to the same.
  • Technical leaders are under mounting pressure to get a return on their massive investments in technology by using these assets to drive down costs, as well as increase revenues (traditionally the principal focus for front-office technologies)
  • This increasing emphasis on ROI means Technology leaders need to develop flexible IT systems/assets, that, by adapting to business change, can appreciate in value over time.

Understanding complex technology is one aspect, but a firm grasp of business problems is also essential. IB technologists work closely with the sales, trading floor, middle office operations to develop the software that enables them to make the split-second decisions or use their creativity and initiative to enhance state-of-the-art front-to-back systems and databases. Whatever the task may be, IB technologists work in a fast-moving environment where solutions move from concept to implementation in weeks and months rather than years.

 

What Do You Do As an Investment Banker?

Posted on by Imarticus Learning

What is Investment Banking?

Investment banking can be defined as a specific decision of the banking industry that engages in advisory-based financial transactions on behalf of their clients that ranges from individuals to corporations and governments. The investment banking division is responsible for raising capital for their clients from public or private investors. Investment banks leverage their large network and expertise to connect investors with excess funds and clients with profitable business opportunities looking for investors.

In the broad sense of things, the investment banks help to channel funds in the economy efficiently using their expertise in the domain. The Investment banker course also provides services related to the underwriting of debt and equity securities for various corporations. They also help with the mergers and acquisition deals, facilitate the sale of securities, broker trades for corporations and investors, and provide financial guidance to their clients on profitable investment avenues.

Role of an Investment Banker

Now that we have understood what investment banking is and what the investment banks do, let’s understand the role played by investment bankers and how they add value in this industry. We will look at the role of investment bankers in context to the functions of an investment bank in the economy.

  • Role of Investment Banker in IPOs and Underwriting: One of the major functions of investment banks is facilitating the underwriting services to private corporations and other entities. You must have heard of Initial Public Offerings (IPO), during IPOs the private company is seeking funds from the public by selling the company’s shares at a predetermined price.A lot goes into selling the share of a company to the public; a major role is played by investment bankers in facilitating the IPOs.First and foremost, before offering the shares to the public, the valuation of the company is done to determine the optimum prices for shares. Investment bankers play a huge role in researching and conducting financial analysis to analyze the financial well-being of the firm.

    After conducting a complex analysis the price of the security is determined. Selecting an optimum price is important to avoid any subscriptions or oversubscription scenarios. Investment banks act as a mediator in the IPOs and also acts as underwriter for shares issued.

  • Investment Bankers in Mergers & Acquisition: Another important role of investment bankers is highlighted in the mergers and acquisition deals. Mergers and acquisition deals are carried out by companies who are looking to benefit from coexistence and mutual synergy.It helps companies to avoid competition and collectively profit from improved synergy. In the case of acquisitions, a company acquires another in the process and takes over its operations and customer base. Mergers and acquisitions might look simple but it involves a lot of work on the part of investment bankers.
    They are responsible for finding the best competitor for the deal so that their client s could benefit from the M&A deal.Investment bankers have to leverage their network and expertise to identify the perfect fit. It also involves doing the valuation for companies so that a fair price is established for the sale or purchase of another entity. Investment bankers help to determine if the price offered by another company is fair or not (in case the company is being acquired) and determine the fair value of the other entity (in case the company is acquiring).
  • Investment bankers as financial advisors: In addition to M&A deals and underwriting services, investment banks also provide advisory services to their clients. Generally, the advisory services provided by investment banks are limited for corporations, government entities, and high net worth individuals.Various new financial instruments are complex and need expert guidance during investment, for example, alternative investments. The investment banker also guides their clients on these investment avenues after factoring in their risk appetite and return expectations.

Understanding Mutual Funds: Are They Safe?

Posted on by Imarticus Learning

What is a Mutual Fund

There are different assets and holdings to invest with higher and lower risks in the financial market. A mutual fund works as a company that pools money collected within a diverse set of investors. This money is invested in a varied set of securities, or financial products, such as bonds. The whole set of holdings is known as a portfolio. The management of the funds is carried out by money managers who find the right allocation, optimizing and monitoring the capital gains for the investors.

This limits the decision power of its investors. Indeed, holders do not have voting rights. As a matter of fact, the ownership of the fund is represented by the shares. The gains and losses will then be distributed proportionally among the shareholders. Mutual funds are attractive to conservative risk profiles, as they are affordable, diversified, and allows the investors to easily redeem any fees.

Types of Mutual Funds 

Depending on the nature of the securities included in each fund, the mutual funds can be categorized into different types.

Some of the most common funds are denominated money market funds. This type of fund has a lower risk and is made through short-term instruments. The safety of the fund responds to the type of investment, which is made only through safe assets.

As aforementioned, the risk profiles respond to different types of mutual funds. To more aggressive risk profiles, bond funds address the investment through bonds. Stock funds, conversely, allocate the investment using corporate stocks of a diverse nature (regular dividends stocks, non-regular ones, index funds, or specialized sector funds of a specific industry). Finally, target-date funds manage the investment with a varied set of financial assets, shifting the mix periodically.

Risks Management

Any type of investment has an inherent risk associated with it, which varies according to the sector and types of assets used to invest. The nature of the mutual funds makes them very suitable for risk-averse profiles. Mutual funds reduce the risk through three axes: volatility, concentration, and inflation control procedures. For the former item, a systematic investment plan (small investments in short time intervals), such as those applied in a mutual fund, reduces the risks derived from the market variability.

Following with the next one, i.e. concentration, the famous financial advice gives us a clear hint on the strategy used: “One should not put all the eggs in the same basket”. As mutual funds are defined mostly as a vehicle of investment in varied sectors using different assets, the impact on diversified portfolios allows investors to foresee and prevent dramatic loss. Lastly, the funds also have advantages in terms of taxation, such as tax savings and a paying free-tax scheme for the returns.

Why Should You Partner with Imarticus to Learn About Financial Assets?

In partnership with LSED Academy, we offer a holistic, practical program to certify professionals in Investment Banking Operations. In a more competitive and complex financial work market, we offer a complete 180-hour program to not only get a deep understanding of complex financial assets and products but also to enhance the possibilities to get salary hikes and career development.

The 360-degree program alternates from the comprehension of complicated financial products trade life cycles, risk management courses, and market regulation modules, focusing also on the development of soft skills.

Conclusion

Being able to understand and manage investments using innovative financial assets is a crucial skill to work within the financial market. You can become a part of the Imarticus working force, participate in the investment sector and improve your salary. Get a certification online in banking operations with Imarticus. Join today!

Use of Data Analytics in Improving Working Capital Management

Posted on by Imarticus Learning

What is working capital management?

Working capital is an organization’s utilization of money to cover its daily needs, such as paying for raw materials, supplies, and salaries. The term can also be applied to individuals. Working Capital Management is defined as “managing cash flow so that it fulfills all the business needs”.

For example, if you have $10 in your wallet but need $100 worth of groceries today, your working capital would be negative $90. Working capital management takes care of the flow of funds within the organization. It ensures that funds are available to meet short-term obligations without having to borrow or sell assets. It’s essential for all businesses because it affects the growth and the profits of the company.

Without sufficient working capital, companies will fail before utilizing their full potential. Working capital management is a critical function for every company. Whether you are operating in the manufacturing or service industry, managing your working capital will impact your ability to grow and succeed.

How does it help the organizations?

Data analytics can help organizations measure how much money they need for their working capital based on their current situation. This way, they can improve their working capital management by minimizing risks such as overinvesting or underinvesting in one area while neglecting others.

There is a need for both MSMEs and large manufacturers to remotely manage their supply chain, cash flows, etc. This has led to a rapid and massive shift away from manual processes. This is where automation comes into play – Accounts Receivable Automation (ARA) was developed as an alternative solution by many companies who needed more control in this area of their business while still managing all aspects with less workforce. These systems allow businesses to deal directly with suppliers and it drastically cuts down processing between payments and delivery.

Application in the real world

In the past few years, the use of Data Analytics has been steadily increasing as a way for organizations to understand their customers better and identify trends.

In today’s world, data analytics is indispensable as it facilitates the efficient working of an organization. The proper recording and analysis of every activity related to the manufacturing cycle of the products help in having visibility of the processes.

Data Science Course

One particular area where Data Analytics can be applied is in examining customer payment patterns, such as when customers pay or don’t pay on time. For example, one company found that because of the customers who paid late, they were losing roughly about $21 million annually due to delayed payments from other clients. It also examined the reasons as to why people pay late. They came up with several insights like cash crunch during month-ends, etc. that stopped them from making these payments.

Using a company’s balance sheet and cash flow statement, a financial analyst can determine when the business has excess funds and also the times when they need more money. This analysis can then be used to establish an appropriate financing strategy that balances the company’s needs with its ability to repay the debt over time. Data Analytics makes the entire process smoother and better.

Conclusion

To maintain change, it is imperative to differentiate between noise and signal. This is done by developing measurable, granular  KPIs that are monitored strictly. Carefully analyzing historical data can provide valuable insights into managing networking capital by quickly finding and dealing with emerging issues.

Contact us today if you want to be well equipped when it comes to dealing with such situations. With a digital analytics course, implementing these tactics in your business becomes easier.

With a data science course, you become aware of the techniques that go into it. The course comes along with a placement opportunity so that you’re all set to apply your business analytics knowledge in managing operations.