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INVESTMENT BANKING : A BASIC IDEA IN BRIEF

Investment Banking pertains to different activities of a financial service company or any corporate division that consists of advisory-based financial transactions on be-half of the individuals, corporations etc. An investment bank may also assist companies involved in mergers and acquisitions and provide ancillary services such as market-making, trading of derivatives and equity securities and also other works on research. Most investment banks maintain prime brokerage and asset management departments in conjunction with their investment-research business. As an industry, it is broken up into Bulge Bracket, Middle Market and Boutique markets. 

Investment Bank do not make deposits. All investment banking activities are classed as either ‘sell-side’ or ‘buy-side’. The ‘sell-side’ involves trading securities for cash or for other securities. The ‘buy-side’ involves the provision of advice to institutions that buy investment services. Private equity funds, Mutual funds, Life Insurance companies, Unit Trusts and Hedge Funds are the most common types of buy-side entities. Investment Bank can also split into private and public functions with a screen-separating the two to prevent information from crossing. The private areas of the bank deal with private insider information that may not be publicly disclosed, while the public areas such as stock-analysis deal with public information.