Professional Investment Banking

Navigate the challenges facing investment banks amid a pandemic and recession. Scarce capital, shrinking margins, and lower cost of capital demand cost reduction while balancing investors' and corporations' needs.

Explore technology disruption in professional investment banking, highlighting fintech's rise and lower-cost capital raising, wider reach, and Bitcoin's role in cross-border financing against traditional banks.

Investment banks source deals through intermediaries in the capital-raising process, a key revenue step. Bulge bracket banks use dedicated sourcing teams with industry networks and selling skills.

Technology transforms investment banking by enabling global, automated networking platforms that identify hot deal sectors, build databases of potential clients, and pitch them to offline partners.

Identify how trade shows gather industry decision makers, enabling investment bankers to scout acquisition targets and enhance sourcing performance using a structured methodology despite elusive KPIs.

Explore private placements, their contrast with public offerings, and how investment banks use accredited investors and non-disclosure agreements to balance disclosure and regulatory requirements.

Initial public offering timelines contrast with fast private placement turnaround and exclusive opportunities, as government investment banks help raise money within weeks, leveraging private placements exempt from disclosure laws.

Private placements let companies raise funds while remaining private, with limited disclosure, higher returns for investors and banks, and favorable terms negotiated by investment banks.

Learn how qualified institutional placements enable listed Indian companies to raise capital by issuing equity and securities to predefined institutions, a process related to private placements.

Identify who can subscribe to a qualified institutional placement, including mutual funds, pension funds, and insurance companies; retail investors are excluded, and explain how price discovery shapes qip pricing.

investment banks help clients raise equity capital through initial public offerings, and underwrite by taking a firm commitment to buy the entire issue, bearing the risk and charging higher fees.

Evaluate market timing, public opinion, and free float size to decide underwriting; consider investment focus, investor cash positions, and industry health to assess risk.

Use follow-on public offers to raise funds by selling more shares for already listed companies, unlike an IPO; dilutive follow-ons dilute share value and invite investor scrutiny.

Explore non-dilutive follow-on public offers, where existing shares held by promoters or directors are offered to the public, not new issuances, with banks monitoring sentiment to stabilize prices.

Understand how market offerings and follow-on public offerings (FPOs) raise capital, set pricing with investment bankers, and why investors may buy FPOs versus the open market.

Explore why flotation costs vary from 2% to 8% of gross receipts due to fees from intermediaries such as investment bankers, lawyers, and accountants and the difficulty of selling securities.

Analyze flotation costs and cost of capital and their impact on return on investment and net present value. Compare weighting capital costs with deduction of flotation costs in capital budgeting.

Roadshows in investment banking unite issuing companies, investment bankers, and potential investors to gauge demand and set pricing, serving as information dissemination for both sides in Russia's listings or privatizations.

Investment bankers conduct road shows across cities to gather investor interest and price discovery, while the issuing company controls content and the CEO or CFO delivers presentations.

Explore bridge loans in investment banking, where banks temporarily provide cash to complete acquisitions, often in leveraged buyouts, and compare bridge financing with take-out financing, noting higher costs and risks.

Bridge loans carry high risk, as shown by the 2008 crisis when liquidity froze, takeout financing for acquisitions disappeared, and banks faced solvency challenges due to large, long-term loans.

Examine ethics and laws shaping investment banking around bridge financing. Identify conflicts of interest in advisory fees during mergers and acquisitions and how firms mitigate risk with separate banks.