Submitted By:- Submitted To:-

Name:- Suraj Kumar

Faculty name:-
SID :- 2247360
NEHA SAINI
SUB:- IB MAM.
Assignment :- GA 1
Sem :- MBA 2nd Sem
Q. 1 What is investment banking?
Investment banking is a special segment of banking
operation that helps individuals or organisations
raise capital and provide financial consultancy
services to them. They act as intermediaries
between security issuers and investors and help
new firms to go public.
They either buy all the available shares at a price
estimated by their experts and resell them to public or sell
shares on behalf of the issuer and take commission on each
share.
Description: Investment banking is among the most complex financial mechanisms in the world.
They serve many different purposes and business entities. They provide various types of financial
services, such as proprietary trading or trading securities for their own accounts, mergers and
acquisitions advisory which involves helping organisations in M&As,; leveraged finance that involves
lending money to firms to purchase assets and settle acquisitions, restructuring that involves
improving structures of companies to make a business more efficient and help it make maximum
profit, and new issues or IPOs, where these banks help new firms go public.

Let’s understand how an investment bank earns money by providing acquisition advisories.

Think of company ABC buying another company XYZ. ABC is not sure how much company XYZ is
really worth and what will be the long-term benefits in terms of revenues, costs, etc. In this scenario,
the investment bank will go through the process of due diligence to determine the value of the
company, settle the deal by helping ABC prepare necessary documents and advising it on the
appropriate timing of the deal.

Here the investment bank works on the buy side and some other investment banks may be working on
the sell side to help XYZ. The bigger the deal size, the more commission the bank will earn.

Bank of America, Barclays Capital, Citigroup Investment Banking, Deutsche Bank, and JP Morgan
are some of the largest investment banks in India.

Q. 2 Explain 4 Types of investment

banking?   
1. Bulge Bracket Investment Banks:
o The Bulge Bracket Bank covers the top most recognizable investing
firms throughout the world. They have the highest brand values
among other banks.
o Banks that are falling under this category are Goldman Sachs, JP
Morgan, Morgan Stanley, and others. They provide financial
services for huge investments, advising, and research. These banks
typically categorize their investment banking division into product
groups and coverage groups. They are well-known outside the
finance industry.
o They focus on huge projects rather than working on smaller ones,
making sure that any sector which is seeking their assistance is
asking for heterogeneous projects.
o Their primary goal is to provide one genuine product, providing a
wide range of financial services, also including advising and
analysis.
o You will find that Bulge Bracket Banks has offices in major financial
hubs globally, making their network strong with various major
clients over all the world, but you will not be able to find them in
small cities.
o The deals for these types of banks should be of huge amounts in
the range of over $1 billion or even greater. These banks are the
biggest investment banks with the greatest parties as their clients.
2. Elite Boutique Investment Banks:
o If you are looking for a higher-paying investment bank for an
analyst, these banks are where you have to stop looking. Lazar LLC,
Moelis & Company, and Evercore Group LLC are known as Elite
Boutique Banks.
o They tend to give higher salaries to their employees as compared to
any other bank, not even Bulge Bracket, which has the highest
brand value. They are known for limited types of activities.
o These banks don’t have the constraints of location, one will be able
to find these types of banks all over the locations whether a posh
 one or a local one, hence they have more exposure than Bulge
Bracket Banks.
o Different Elite Boutique will focus on single services say if one elite
bank is providing a service of advising, the other will be
concentrating on capital restructuring. Getting homogenous
projects from their clients is their primary goal, with a deal size
approximately of $1 billion, making them the competitor of Bulge
Bracket.
3. Regional Boutique Investment Banks:
o Regional Boutique Banks are those that are dealing in smaller
transaction sizes. Deals that they carry forward are usually less
than the size of $10 million.
o You will find out that they usually assist the companies with the
work of loan financing. Raymond James, Robert W. Baird, and
Brown Brothers Harriman are the banks that fall under this
category.
o These types of banks are not specialized for any specific product or
in any specific sector. They will be working on different projects and
different clients from different sectors but in smaller cities that
have quite local companies or organizations.
o These banks have strong connections and networks within a
particular location, they don’t focus on clients who are outside their
specified geography.
4. Middle Market Investment Banks:
o Middle Market Investment banks focus on small emerging
businesses to get financial advice and assistance. Working in these
banks will let employers make connections within a region. It
focuses on the middle market customers and finance that
surrounds its office.
o They don’t have as much brand value as the upper-mentioned
banks have. It focuses on middle-market customers and finance.
Jefferies, Macquarie, and RBC Capital Markets are the banks that
work as Middle Market Banks.
o These types of banks are categorized as those banks that deal in
transactions the size of $500 Million to $1 Billion. They usually
target clients who are too big for the Relational boutique type or
too small for the Bulge Bracket type.
o They don’t serve a wide area but are under a specific spread, not
presented internationally. Mediocre-sized businesses are the main
client of these banks.