In this fast-changing world, everyone wants to grow financially and expand their business. But several setbacks in handling assets and allocating them to proper usage have been the main problem for many companies. This is the junction where the concept of investment banking and investment bankers comes to play.
From issuing stocks in a company to developing a technology that will hit the ball out of the park, investment banking is full of opportunities and can create wonders. As the field is booming and helping different businesses to grow continually, the demand for investment banking courses is also on the rise. The reputation and high salaries are luring students to take proper knowledge and compete for the jobs available in the market. Now let us understand from the basics to the core of investment banking.
What is Investment Banking?
In general terms, investment banking is a special division of any financial institution, which helps companies from private to government, large to small in the creation of wealth through certain processes that include underwriting and merger and acquisitions. These financial institutions which provide investment banking act as the negotiator between the people who have the money(investors) and entities that need large sums for business growth(corporations).
The investment bankers make sure of certain tasks in investment banking and those are:
- Maneuvering equity and debt funds in the market and helping companies to raise capital.
- Creating an advanced financial model to show the effectiveness of mergers or acquisitions.
- To steady a company's growth by using business valuation analysis tools like income statements, balance sheets, cash flow statements, or others.
- With the help of thorough research finding ideal clients for business.
- Managing and assisting several other spheres of financial transactions.
Two Pillars of Investment Banking
Any investment banking certification course will ensure to teach two core areas of investment banking, which are like the wheels of a bicycle. The two pillars are M&A Advisory and Underwriting.
M&A Advisory Services
With this process, the investment bankers help companies to locate, evaluate, and complete the acquisition of businesses. The financial institutions have expanded networks that help them to analyze and solidify deals on the behalf of their clients. With M&A they can act as a negotiator for both sides and make offers that are beneficial for everyone.
Underwriting Services
With this process, the financial institutions amass capital by selling stocks or bonds to the investors. These are mostly done in the form of IPO (Initial Public Offering) where the institutions not only help in selling and marketing but also act as a guarantor.
Further, Underwriting can be divided into three types:
- The financial institution makes a commitment to buy and sell all the shares and take full financial responsibility.
- The financial institution can return the unsold shares to the company and will not take total financial responsibility.
- If the financial institution fails to sell all the shares at the offering price then the deal with the company is called off.
Skills Needed to Achieve Successful Investment Banking
A certificate in investment banking will equip you with the tools necessary to excel and upgrade.
Financial Modeling
Creating mathematical models to demonstrate and access the historical, current, or projected value of several kinds of assets and investments.
Business Valuation
Evaluation with the help of DCF, comparable transactions, and multiples approach.
Transaction Documents
Creation of important documents for the smooth flow of data, which includes CIM, confidentiality agreement, term sheet, and many more such things.
Relationship Management
Working cordially with the newly acquired and existing clients in a uniform manner and keeping them happy.
Conclusion
If you are interested in investment banking then learn the skills needed with the help of any online Investment Banking Course available and then your opportunities will be endless.
