Investment Bank (IB)
Investment banking covers the provision of a range of specialised banking and financial services to wholesale (i.e. not retail) clients. Investment banks can be stand-alone providers or divisions of bigger banking groups. And stand-alone providers can offer a full range of investment banking services and products, or can be focused on single products. Investment banks offer two basic suites of products and services: corporate finance and global markets. Some banks include transaction banking in their investment bank; others house this service (providing cash management, trade finance, securities services etc) in their corporate banks. Corporate finance broadly speaking covers financial advisory (typically M&A and corporate divestments) and capital raising (in the form of equities, bonds, syndicated loans, convertibles, securitisation, and structured finance). Global markets cover the sales, trading and research of equities, fixed-income (bonds), structured and securitised products, derivatives, commodities and other tradable financial products). The client base for corporate finance comprises companies, governments and state entities, other financial institutions, private equity firms and hedge funds. The client base for global markets comprises institutional investors i.e. insurance companies and pension funds, asset managers, private wealth (high net worth individuals and family offices), sovereign wealth funds, the trading arms of hedge funds, and others. Investment banks are essentially intermediaries, making money from fees and commissions. Since the global financial crisis, their proprietary trading activities have been curtailed via regulation.