Investment Banking

 Financial services firms that act as intermediary in large and complex financial transaction
 Investment banks are involved when start-up company initially offers IPO or company
merges with competitor
 Also act as broker or financial advisor for large institutional client, such as pension fund
 Also act as intermediary’s b/w corporation and financial markets by helping them issue
shares of stock during IPO or additional stock offering
 Arrange debt funding for companies by finding large scale buyers for corporate bonds

Commercial Banking

 Financial institution that accepts deposits, provide checking account services, makes various
loans, provides individual and small business with basic financial products such as CD’s and
saving accounts
 Most individual do banking with commercial bank
 Make money through offering and earning interest from loans such as mortgages, auto
loans, business loans and personal loans
 Customer deposit provide bank with funds to make these loans

Investment management

 Does not only mean purchasing or selling assets but also include management of financial
assets and other investments
 Devise short/long term plan for purchasing and disposing of portfolio holdings
 Other services are banking, budgeting, tax services and duties
 Also known as money management, portfolio management, or wealth management
 Asset managers : customers or buy side of an institutional sale of financial instruments
 Traders and salespeople: are on the sell side and provide liquidity to asset managers
 Customers/ clients: gives money to asset and fund manager who spends to accomplish
clients goal
 Sell side provide buy side with information such as research, ideas, meeting with officials and
try to get asset mangers trade with them
 Sell side make commission on any trade that it facilitates

Venture capital

 Form of private equity or type of funding given by investors to start-up or small business that
have potential for long term growth
 Given by well-off investors, investment banks, financial institution
 Not always in monetary form
 Can be in the form of knowledge in technical/ managerial matters
 Allocated to small business with extraordinary growth potential or which has expanded
rapidly and have potential to grow big

Private Equity

 Equity capital not quoted on public exchange

 Investors or funds that invest directly in private companies or buy outs of public companies
 It is raised by retail or institutional investor and used to finance new technologies to increase
working capital within the firm, to make acquisition or to strengthen the balance sheet
 Here most investors are those who can commit large sum for longer period of time
 Private equity require long holding period for turnaround of distressed company or liquidity
event such as IPO or sale to public company
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