Investment banking offers assistance to various clients in raising financial capital by acting as an agent in issuance of securities. By acting as a liaison during mergers and acquisitions, investment banks assist their clients by advocating for their clients’ interest in raising financial capital.
There are many components of investment banking; however, the two main components of investment banking are trading securities for cash or other securities “sell side”, and providing sound financial advice to institutions that buy investment services “buy side”. Differently from other banking industries, investment banking does not offer deposits and or have indirect fees.
Investment banking has the ability to provide services to both the private and the public sector. Private services are always confidential in nature. For instance, Martin Lustgarten, a well-known investment banker who provided services to both the citizens of Columbia and Mexico, was able to successfully process tens of millions of dollars while successfully keeping his clients’ information confidential. In the public sector, stock analysts analyze the future activity of their client’s public information.
Martin Lustgarten operated companies around the world to include Hong Kong, Panama, Singapore, etc. His companies provided capital loans and purchase-order financing to firms in Venezuela that are involved in the international trade. Lustgarten was participating in both the “sell side and the buy side” of investment banking by exchanging goods for cash, as well as providing advice to these firms and or individuals in the purchase of investment services.
Investment banking is fairly a lucrative but yet a necessity for companies, individuals, and government entities doing business internationally. Having the ability to obtain financial capital overseas without interruption in the exchange of services, individuals, companies and government agencies are able to expand in around the world in places that would otherwise have limited access to foreign investments. Find Lustgargen on Facebook for more updates.