The investment banking arena is an area that is highly refined. It is a segment of banking operations that remains sophisticated, and very necessary. The person requiring an investment banker, generally calls upon the services of the professional investment banker, in order to acquire much-needed Capital, as it relates to his or her business endeavor. Also: as a bonus, the investment banking professional is at the disposal of the company executive to provide him or her with financial advice, as to the allocation of the funding—if the entrepreneur or Chief Executive Officer so requires it.
The Investment Banker as Intermediary:
The investment banker is unique in that he or she can perform in the capacity of an intermediary. His or her role is a go-between of the issuer of a security and the investor. He is at the disposal of the start-up, allowing such an organization, the capability of going public. The investment banking house is able to purchase all of the shares available, at a price that is projected by their expert staff, and then resell the shares to the public; or sell the shares on behalf of the issuing agent, taking a commission on each singular share, sold.
The Investment Banking House is Relative as it Pertains to Many Financial Roles and Services:
The varied description of services offered above, may at first seem overwhelming, to a person new to the concept of investment banking and investment banking services. Even a person, fairly sophisticated and knowledgeable about financial matters, may require a clear more concise definition. In order to accommodate the interested audience, investment banking, more clearly defined, is truly complex. However, it basically is comprised of many complicated mechanisms, from a financial standpoint. The investment banking house, is purposeful, in a varied way; and relative to many types of business enterprises. The investment banker or organization provides services such as proprietary trading, trading of securities—relative to their own accounts; it involves itself in mergers and acquisitions of various companies; and provides advisory services.
The investment banker leverages finances, with regard to money lending in order to purchase assets. It is involved in the settlement of acquisitions. It provides companies with financial restructuring, in order to improve upon the financial infrastructure of organization. The restructuring is necessary in order to assure that the company is more efficient, as to operations. When the company becomes more efficacious with respect to its operability, the result is that it attains maximum profitability. The investment banker, too, provides new issues, also referred to as IPOs, in order that the new firms are able to go public.
The investment bank earns its dimes and nickels, so to speak, by way of advising companies and assisting them in their growth. In example, the Smith Organization is ready to purchase the Jones Company. The matter of concern is, though, that the Smith Organization is not at all certain about the value of the company it wishes to buy. They, accordingly, are confused about any long-term or substantial benefits that may come to them, when acquiring the Jones Company. The investment banking house makes it a point of providing services, to the Smith Organization, in way of due diligence, in order to properly attain the true value of the Jones Company. It provides settlement services for the Smith Organization, by preparing, legally, all of the required documents, relative to the purchase. It advises the Smith Organization, accordingly, on how to handle the deal. As it pertains to the preceding advice, the Investment Banking Organization, knows full well, proper timing is of the utmost importance, when the Smith Organization approaches the Jones Company about its purchase plan.
The preceding scenario, provides the reader with how an investment banking organization makes use of its skill-set, when working on behalf of the client, wishing to purchase a company. That said, there are other scenarios, wherein, the investment banking organization is working on the sell side. The bottom line, though, as to the banking organization, earning its revenue, rests on the deal, which it has performed on behalf of its client. In other words, “at the end of the day,” the commission earned by the commission bank is relative to the size of the deal. The larger the deal, the more in the way of a commission, the investment banking house has earned.
Martin Lustgarten is Chief Executive Officer at Lustgarten, Martin. He works within the investment banking profession. His primary residence is located in Ponte Vedra Beach, Florida. His investment banking experience is quite extensive.
Lustgarten is a great fan of vintage collectibles. He appreciates anything that has value; with innate beauty attached. Naturally, due to his expressionism, within the preceding areas, Mr. Lustgarten is a curious thinker. He does not ignore interesting facts or insights. He truly enjoys trading items such as vintage watches. He is a multi-task oriented individual; and is interested in various matters of subject. It is the preceding two characteristics which allow Mr. Lustgarten to provide sound, yet financially-creative investment advice to the clientele which he serves, in a truly reliable and refined, professional manner. Creativity and reliability: Mr. Lustgarten strives to assure that his clients receive the highest level of investment banking advice and services; available or that he is able to supply.