So you want to know more about investment banking. What is it? How is it different than traditional banking known as retail banking? How does investment banking work? We describe investment banking and answer these questions below.
To start of, investment banking is a kind of banking that focuses on growing wealth through investment of money. Investment banks usually do no accept deposits such as checks or direct deposits. In fact, they may not have a bank branch at all. You often will not find tellers at an investment bank. Investment banks are more interested in pooling money together to make a profit for themselves and ultimately their shareholders or owners.
Investment banks invest their funds or shareholder money through a number of means. They will actually purchase stocks and bonds on the market as an institutional client. Stocks will then be resold for a profit or kept for dividend payments. Bonds can be kept untill they mature or resold again.
Some investment banks will buy companies outright and manage them directly. Others will have an ownership stake but let the bought company continue to manage itself or hire new managers. Profits from the acquired company however, will flow to the investment bank that is the new owner.
Investing money and buying companies are the only things that investment banks do. Investment banks offer consultation services. They include assisting firms going through buyouts, mergers, acquisitions and restructuring. The investment bank can also appraise the value of company stock, issue it and be responsible for selling it on the stock market. All of these service incur a fee from the client that is paid for the investment bank’s service.
Investment Banker, Martin Lustgarten
Martin Lustgarten is an investment banker that is the founder of Lustgarten Martin. The firm operates out of Florida and focus on the niche markets in South and Central America. Mr. Lustgarten has an understanding of the business climate of Latin America and is fluent in the Spanish language and Latin American culture. This unique insight allows Lustgarten Martin to spot new opportunities in niche Latin American markets before others.
Mr. Lustgarten holds dual citizenship in Austria and Venezuela. His knowledge of world markets with an expertise in Latin America has made his firm a highly successful boutique investment house. He resides in Ponte Vedra Beach with his wife and kids. Martin is also an avid collector or antique collectible items.
For more information please visit http://mlustgarten.blogspot.com/