Corporate Finance Team

Corporate Finance “transactions in which capital is raised in order to create, develop, grow or acquire businesses” ICAEW Ownership of business Expansion of business Raising and restructuring debt Investment banks provide financial advice and services to their clients

Back to Basics Advice and funding to corporate and other clients What is an Investment Bank? Advice and funding to corporate and other clients Engage in trading activities for their clients or themselves Distinct from retail banks Citi, Barclays and UBS – ‘Universal’ banks

Back to Basics The Market Bank of America Merrill Lynch, Barclays Capital, BNP Paribas, Citi, Credit Suisse, Goldman Sachs, J.P. Morgan, Morgan Stanley, Nomura, RBS and UBS.

Back to Basics Ownership Public companies – trade on the stock exchange Private companies - handful of investors=large slice of shares Partnerships – directors of banks – generally smaller banks

Back to Basics Clients Corporates – including FSOs Funds – pension funds, hedge funds, private equity funds Sovereigns – export credit agencies, sovereign wealth funds High net worth individuals – investable assets over $1 million Internal Bank – protect the bank against risks

Back to Basics Activities Give Advice – buying and selling companies, structuring, raising money, risk management, purchasing financial products

Back to Basics Activities Investment Management – investment of corporates and individuals

Back to Basics Activities Providing Financing– making loans to and/or purchasing the shares of corporates

Back to Basics Activities Trading– buying or selling shares, debt products, commodities, derivatives – clients or bank

Back to Basics Activities Research– monitor industry trends, economic developments – clients and banks

Back to Basics Making money! Service fees Dividends – income from investments made in shares Interest – income from loans Investments - profits Trading – buying and selling securities

Back to Basics Regulation Capital adequacy – reserve capital and its access Activities undertaken – separation of activity Trading on their own behalf – in the US – restrict trading with the capital they hold Insider dealing – information not in the public domain Money laundering – criminals do not use the systems Transparency – detailing activities and finances Pay – salary under scrutiny

Back to Basics Why do we need Investment Banks? Provision of finance – access to other money such as pension funds Advice – conduct transactions – economic growth and stability Risk Management – price fluctuations, economic changes, and political instability - issues minimized on the real economy Information – analyze corporate activity and economic trends

Media The Economist The Times and The Sunday Times The Guardian The Week The Financial Times Newsnight, BBC2 Inside Job – 2010 Film Margin Call – 2011 Film