An investment bank helps individuals, businesses and governments raise capital by issuing securities for their clients. Investment banks issue securities, but they also assist with mergers and acquisitions. They give out advice to both sellers and buyers on subjects, such as business valuation, pricing and structuring of transactions and negotiations.
There are two avenues in investment banking referred to as the buy side and the sell side. The sell side of investment banking focuses its efforts on trading securities for cash and also dabbles in the promotion of those securities. The buy side entails the act of offering advice to the purchasers of investment services. Some examples of buy side entities include mutual funds, hedge funds, unit trusts, life insurance companies and private equity funds.
Investment banking is commonly divided into three separate categories referred to as front office, middle office and back office. The front office is responsible for creating revenue and consists of investment banking, as well as sales and trading. Investment banking is responsible in assisting clients in raising capital by issuing securities for them. Sales and trading departments main task is to offer ideas to clients and accept their client’s orders.
The middle office consists of internal controls, treasury management and corporate strategy. The treasury monitors potential risks and is in charge of the bank’s funding. Internal controls tracks and also analyzes the flow of revenue. Internal corporate strategy focuses on profit strategy, but does not deal with actual revenue.
The back office department in investment banking deals with operations and technology. Operations play a critical role in that they are responsible for double checking each transaction, ensuring that they are correct. Each bank has a technology team working on creating and updating the company’s software and also are in charge of technical support.
One of the most reputable investment banking firms is Madison Street Capital. Madison Street Capital is an international investment banking company headquarted in Chicago, Illinois, with offices located in North America, Africa and Asia that specializes in financial advisory services. They deal with acquisitions and mergers and offer financial advice to both private and public companies. Madison Street Capital believes strongly in building powerful firms in communities throughout the United States.
Madison Street Capital’s experienced and professional staff, through their hard work and dedication has recently earned CEO Anthony Marsala, The M&A Advisor’s 7th Annual Emerging Leaders Award. The outlook for 2016 looks extremely promising for Madison Street Capital. The volume of transactions in 2015 were 27 percent higher than those of the previous year. Sparked by the heavy influx of transactions in the fourth quarter of 2015, 2016 is predicted to be a record year for Madison Street Capital.
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