Investment banks help public as well as private organizations and companies to gathers funds in both equity and debt capital markets. These banks were initially founded in order to raise capital and provide assistance on corporate financial strategies, such as mergers and acquisitions. Investment banks presume many diverse roles such as handing security issues, providing public and institutional investors with brokerage services, providing corporate clients with monetary advice, offering guidance on mergers and acquisition deals and more. These days, you can also find banks to have ventured into foreign currency exchange, bridge financing and private banking.
Eugene Bernshtam graduated with a degree in finance from Loyola Business School and received Series 7 and 63 licenses that certified him to work for an investment banking firm after college.
Basic bank for invest
This type of bank tends to issue stocks and bonds to customers for a prearranged sum. Then the bank invests this amount which has been used by the client for buying stocks and bonds. Such kinds of investments diverge across different banks. In the state where this kind of investment is permitted, investment banks come with networks of lending and monetary organizations that they can derive income from. Other banks also make investments in property and construction development. Customers with stocks and bonds would tend get payments from the amount of profit that is made on the amount that they have invested for a specific time period.
Both the investment bank and the customer derive profits from the amount primarily invested by the client. As these kinds of banks are entirely familiar with the trade methods, they are regularly consulted about corporate investment activities like mergers and acquisitions by both big and small business houses and corporations.
Merchant bank for investing
This is the other type of investment bank. Such kinds of banks provide business ventures and participate in trade financing with capital in the type of shares and not loans. These banks have their businesses founded on how secure shares are. Such kinds of institutions only fund those business ventures which have only progressed in the world of business. Usually, startup merchant companies do not get any financing. Merchant banks can be considered only as investment banks which are ready to invest some amount of the money of the organization. The wealth is put in the form of an equity investment. The company acts like advisory and research firms into the transaction and offers advice. Lest you want trade financing, you will like to stay in contact with a merchant bank rather than an investment bank.
According to Eugene Bernshtam, the prime function of these banks consists of offering financial advice and services to individuals as well as business houses. Such types of banks function like a type of liaison between the consumers of the securities and the issuers of the wealth. Various companies issue these types of securities in order to gather finances in the stock markets. Merchant banks provide better financial solutions and alternatives to the customers, and can help customers to gather money via low-cost resources. These banks are capable of reviving the economic health of sick firms.