Investment bankers help their clients and organisations buy or sell strategic assets, raise funds, and advise them on financial decisions. It is one of the most rewarding professions in the financial domain and is just as demanding as a profession. Let us look at the kind of activities where you will typically find an investment banker involved.
In terms of major activities, there are two key tasks that investment bankers do.
Raising public funds
Corporations seek the help of investment bankers in raising public money through IPOs. With their underwriting services, investment bankers find buyers or investors for the corporation and work on the efforts leading up to the listing of shares. This includes preparing a prospectus, determining the pricing of the stock price band, handling legal and compliance issues, etc. Such services may also be offered for bond offerings and determining factors like the interest rate offered.
Mergers and acquisitions
Investment bankers assist clients on both sides of merger and acquisition deals. They find out the value of the concern, which is central to the M&A deal, and decide on the structure in which the offer is to be made. While on one hand, they decide the composition of the deal in cash, stock swap, or combined deal; the investment bankers on the buying side determine the favourability of the offered deal.
Besides, investment bankers do a lot of data analysis, prepare investment presentations, act as financial advisors, etc. Their work requires the expertise of various skills, two of which are particularly important.
Analysis as a decision aid
Investment bankers need to carry out a lot of research and analysis to draw conclusions from the data and information available. This activity helps them to offer sound financial advice to their clients. This includes analysis of accounting information, stock performance, industry reports, etc., all of which act as the foundation based on which investment bankers offer their services.
Investment bankers are required to perform financial remodelling and calculate and analyse financial metrics. This helps them with company valuations and predicting future performance. This skill set comes in handy when the investment banker offers services in a typical merger and acquisition transaction.
This, in a nutshell, is what an investment banker does, both in terms of skills as well as actual tasks. If you aspire for an awe-inspiring job within finance, investment banking is the choice you should make.