Companies are constantly scanning the corporate landscape for other firms that may be for sale, or may own assets that are worth buying. Buying companies can be a risky proposition. After all, the only way to buy a healthy company is to offer a price higher than the current market price, called a premium. By paying up for the company, the buying company had better make the right moves to get the deal to work. Investment banks help companies on the prowl find buyout targets, make the deal, and sometimes even finance it. Wildly successful initial public offerings leave investors talking and fantasizing for years. Investors who got into Microsoft or Google at the IPO prices have made a bundle. Bank loans: Commercial banks are in the business of lending to companies that need capital. Periodically, a bank may extend a line of credit to a small business, especially if the business is stable. Banks, though, tend to be skittish and won’t lend if there’s even a scent of risk with the company. Internet companies, which have little in the form of assets, for instance may be turned away for bank loans because there isn’t anything to be used as collateral. Underwriters stay involved in the process during this tenuous first day of trading. Investment banks want to do whatever they can to make sure the shares of the newly public company don’t break (close below the initial price). A broken deal is often looked at negatively by investors; plus, a broken deal makes it look like the investment bank didn’t set the initial price correctly.

Investment Banking For Dummies (For Dummies Series)

Written in the straightforward and approachable tone the For Dummies series is known for the world over, authors Matthew Krantz and Robert Johnson have created an indispensable resource for students and professionals new to investment banking.

15. The Platform Delusion: Who Wins and Who Loses in the Age of Tech Titans

During my search for the best investment banking books, I discovered that the publishing industry has divided the genre into several distinct sub-genres, which I'll set out here: Here, we have seen the complete structure of investment banking for dummies. You can also look at high-level investment banking training focusing on Excel-based financial modeling, pitch book preparation, and corporate finance concepts, making it easier to answer technical questions in investment banking interviews. Recommended Articles Hybrid securities: Most of what investment banks sell can be classified as either debt or equity. But some securities take on traits of both, or are an interesting spin on both. One example is preferred shares, which give investors an income stream that’s higher than what’s paid on the regular equity. But preferred shares don’t come with as high a claim to assets as bonds, and this income stream can be suspended by the company if it chooses. This article is a guide to Investment Banking for Dummies. Here, we discuss the introduction, who is an investment banker, and the various Investment Banking Functions. You may also look at the following articles to learn more – Discover the role investment banking plays in the financial system so you can understand the types of services that are provided in the economy.

Investment Banking For Dummies: (2nd edition) by - WHSmith

Keep in mind that this book, like all the books in the For Dummies series, doesn’t have to be read cover-to-cover (although we’ll be flattered if you read it all). Each of the topics is broken down into easy-to-digest parts and chapters. Feel free to skip around the book to areas that interest you most, and save the parts that seem irrelevant until you’re curious about them later. Warning Danger! Danger! Investment banking is full of perils and possible screw-ups. We flag you to these pitfalls so you can avoid taking down a 100-year-old investment banking firm with a multi-billion-dollar blunder. Remember Investment bankers raise money from investors, by selling securities, and then transferring that money to people who need cash to start businesses, build buildings, run cities, or bring other costly projects to reality.

It’s easy to write off investment banking as something a bunch of people in suits can worry about, but that’s a mistake. Increasingly, more Americans are being handed the keys to managing their financial futures. It’s up to consumers to find ways not just to save their money but to invest in assets that will grow in the future. And more times than not, this process requires interfacing with investment bankers and their products. If you are in the process of networking for an entry-level role at an investment bank, we recommend you add this book to your reading list.

Investment Banking for Dummies | Bank Organizational Structure Investment Banking for Dummies | Bank Organizational Structure

But despite the huge possible risks of buying companies, it’s still attractive for a variety of reasons, including the following: Insiders in the investment banking business use all sorts of terms, some decidedly derogatory, to classify the players in the business. Some classifications that investment banks fall into include the following:

12. Liar’s Poker: Rising Through The Wreckage on Wall Street

This is especially true for investment banking, where complex concepts and trends continuously evolve. So to succeed in this highly lucrative but competitive industry, you must learn from the best thinkers. Remember Investment banking operations are rarely identical between firms. Some banks and investment banks are engaged in some front-office areas, while others steer clear of them completely. There are also some peripheral areas of business some banks and investment banks include as part of their services that don’t fall in one of the traditional offices. One example of a service that is often grouped in investment banking is investment management. In an investment management unit, investment professionals are paid to invest money on behalf of individual clients or institutions. The current lay of the investment banking land This book by Michael Lewis is a semi-autobiographical book describing the author’s experience as a bond salesman during the late 1980s.

Investment Banking Books Every Banker Should Read The Best Investment Banking Books Every Banker Should Read

As you can imagine, although investment banking plays an important role in funding economic progress, there’s also lots of money to be made. Investment bankers can’t afford those fancy suits if they’re not getting paid. Last updated: 20 December 2021. Whether it's in film, in books or in industry; information and misinformation about investment banking swirls around like a wild-fire. Particularly in the wake of the 2008 financial crisis, public attention has been heighted regarding this opaque and often lucrative profession. What's it all about? Well, I could describe it as an investment banking book binge happening in slow motion: Bill Gates, an avid reader, has this to say about Principles “Ray Dalio has provided me with invaluable guidance and insights that are now available to you.” My list of the 5 best investment banking books above is as good as any place to start. They're mostly aimed at beginners, and therefore represent a good point to jump onboard with this reading challenge.Institutional client services: The biggest part of Goldman’s business is what it calls institutional client services. Here, the firm arranges and helps conduct transactions for clients who want to buy and sell everything from bonds to foreign currencies and commodities, in a process called market making. Typically, the clients of this part of the business include big financial institutions, governments, and companies. Author Michel Fleuriet, a professor at the Wharton School, explains how the investment banking industry works by offering an insider’s perspective on the operational aspects of the most successful investment banks. Asset management fees: Some investment banks help their clients make decisions on how to invest their money. Investment banks generate asset management fees when they help clients decide which securities they should buy or sell. The book covers all the crucial topics required to understand the fundamentals of the industry, including: