What does an Investment Banker do ?
Investment bankers help companies, organizations, and government agencies raise capital and in mergers and acquisition.
Investment bankers are responsible for examining an organization’s financial status and capital requirements to recommend a suitable strategy for achieving their financial goals. They act as a medium between investors looking for investment opportunities and organizations that want to raise funds. We can say that an investment banker’s responsibilities are divided into two parts: examining an organization’s financial status and helping it reach its financial goals.
For the first part of their responsibilities, investment bankers go through the organization’s goals and requirements through a retainer. Usually, an organization would provide the investment banker with all the necessary financial information. The investment banker uses this information to create a strategy that might include issuing and selling stocks, selling bonds, taking a debt, or combining these, depending on the organization’s financial health and goals.
After the organization has decided on a strategy, the investment banker will have to find and work with investors who match the organization’s profile. While finding and working with a prospective investor, the investment banker works like a salesperson on behalf of the organization that wants to raise capital.
Apart from helping raise capital, investment bankers also construct detailed financial models for Financial Planning & Analysis (FP&A) and Merger and Acquisitions (M&A). They have to perform valuation analyses through different methodologies such as discounted cash flow, transaction comparisons and leveraged buyouts.
Summarizing everything into the following points :
- Capital Raising
- Book Building
- Prospectus Drafting
- Initial Public Offerings (IPOs)
- “Roadshow” Investment Meetings
- Issuing & Selling Securities
2. Private Placement of Capital
3. Mergers, Acquisitions & Divestitures
4. Corporate Restructuring
5. Debt & Equity Advisory Services
6. Bond Issuance & Pricing on Bond Markets
7. Hedge Fund, Mutual Fund, & Pension Fund Advisory Services
