Investment banking

1
Investment banking

• The investment banker was a breed apart, a
  member of a master race. He possessed vast,
  almost unimaginable talent and ambition. If he
  had a dog, it snarled. He had two little red
  sports cars yet wanted four. To get them, he was,
  for a man in a suit, surprisingly willing to
  cause trouble.
• Michael Lewis, Liars Poker

2
What is an Investment Bank

• A catch all term for raising capital and
  providing financial advice to corps. and govts.
• Just about every govt. or large corporation in
  the US calls on investment banks to raise capital
  and get advice on managing its finances.
• They can raise the money a number of different
  ways i.e issuing stocks or bonds to derivatives
  and ABS.

3
Clients

• Investment banking clients can vary from
  sophisticated clients i.e. major corporations or
  large, experienced funds to smaller institutions
  like SMEs usually depending on the size of the
  bank
• Some of the smaller I-banks have focuses on
  either certain sectors i.e. healthcare or
  technology or stage related companies i.e. start
  ups
• I-Banks can raise money for investment vehicles
  i.e CEF, REITS, PE Feeders
• They also provide advice for MA deals and real
  estate deals, assess a value

4
Investors

• Where do they get the money from?
• Institutional investors large
• Endowments
• Pension funds
• Hedge Funds
• Mutual Funds
• Insurance companies
• Individuals HNW
• A separate part of the investments bank (GPC)

5
Typical Deal
Corporate Finance team assess the value of the
company in relationship to the clients goals and
timetable. They call on equity research and ST
team to predict current markets reaction to the
offering and also to develop price and marketing
plan
Bueno Y Sano plans to raise 150 million in
capital by issuing stock. They invite five banks
to bid for the business. They assess each
competitors view and past experience. Piper wins
the business!
The team decides to issue common stock at 22 per
share. They also prepare a prospectus to market
the offering and files registration materials
with the SEC
Bueno Y Sano NYSE BUENO shares are released to
the sales force (institutional and retail) they
distribute prospectus and sells shares to
investors
In the final hours, the price of the shares is
finally set. The syndicate desk underwrites
(buys) the equity along with a group of other
investments banks
6
Culture

• Fast
• Competitive
• Intense
• Meticulous
• Highly rewarding
• Time consuming
• Typical banker

7
Contacts

• Mike Maloney
• JP Morgan
• Consumer Healthcare Group
• Zev Garell
• JP Morgan
• Consumer Healthcare Group
• Drew Schwarz
• Piper Jaffray
• Technology Group