Understanding Industry Flashcards
Investment Banking Divisions
- M&A
- Equity Capital Markets
- Debt Capital Markets
- Sales and Trading
- Research
- Leveraged Finance
M&A
Advises companies on mergers, acquisitions and divestitures, including deal structuring and valuation
Equity Capital Markets
Helps companies raise capital through equity offerings, including IPOs and secondary offerings.
Debt Capital Markets
Facilitates debt issuance for companies, such as bonds and loans, to raise capital.
Sales & Trading
Executes trades in equities, bonds, derivative and other securities on behalf of clients or the bank
IB research
Provides analysis and recommendations on stocks, bonds, market trends for clients
IB leveraged finance
Specialised in high-yield debt and loans used in LBOs and recapitalisations.
Consulting divisions
- strategy consulting
- management consulting
- financial advisory
- IT consulting
- HR consulting
Strategy Consulting
Advises companies on high-level business strategy, market entry, growth and competitive positioning
Management consulting
Focuses on improving organisational efficiency, operations and performance management
Financial advisory consulting
Offers expertise in corporate finance, restructuring, risk management and transaction services
IT Consulting
Guides companies on digital transformation, IT strategy and technology implementation
HR Consulting
Specialises in optimising workforce performance, talent management and organisational design
Private Equity Divisions
- Buyout
- Growth Equity
- Venture Capital
- Distressed/ Turnaround
- Real Estate PE
Buyout PE
Acquires controlling stakes in companies through LBOs
Growth Equity
Invests in companies at a later stage of development, providing capital for expansion without a full buyout
Venture capital PE
Focuses on early-stage investments in startups and high-growth companies, in exchange for equity usually
Distressed/ Turnaround PE
Invests in struggling companies, aiming to restructure and return them to profitability
Real Estate PE
Invests in Real Estate assets or companies, typically involving property development or management
Asset Management divisions
- portfolio management - manage, balance risk and return based on client objectives
- fund management - oversees mutual funds, ETFs, and other pooled investment vehicles, selecting assets to achieve fund goals
- wealth management - personalised investment advice for high net worth individuals
- quant analysis - math models and algos to guide investment strategies and portfolio construction
- sales & distributions - focuses on selling investment to institutional and retail clients
Portfolio management
- Algorithmic Trading: Utilizes computer algorithms to execute trades automatically based on predefined criteria.
- High-Frequency Trading (HFT): Executes a large number of trades at very high speeds to capitalize on small price discrepancies.
- Statistical Arbitrage: Identifies pricing inefficiencies between related securities, trading to profit from these discrepancies.
- Market Making: Provides liquidity by continuously quoting buy and sell prices, earning a profit from the bid-ask spread.
Buy Side
- Hedge Funds: Invest in a variety of assets using diverse strategies, often involving higher risk and leveraging techniques.
- Private Equity Funds: Invest in private companies, typically aiming to improve and sell them at a profit.
- Mutual Funds: Pools capital from many investors to invest in stocks, bonds, and other securities, managed by professionals.
- Pension Funds: Manages retirement savings for employees, investing in a diversified portfolio to meet future obligations
Sell side
- Brokerage: Executes trades for clients, providing market access and investment advice.
- Investment Banking: Facilitates capital raising, M&A, and other financial transactions for companies.
- Research: Provides equity, fixed-income, and economic research to support trading and investment decisions.
- Sales & Trading: Markets and executes the buying and selling of securities for institutional and retail clients.
Venture Capital
- Seed Stage: Provides early funding to startups to develop ideas and prototypes.
- Early Stage: Invests in startups that have a proven concept but need capital to scale operations.
- Growth Stage: Funds companies that are expanding rapidly but are not yet ready for an IPO or buyout.
- Corporate Venture Capital: Large corporations invest in startups relevant to their industry to foster innovation and growth
