1. Corporate Finance Team

2. 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

3. 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

4. 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.

5. 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

6. 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

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

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

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

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

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

12. 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

13. 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

14. 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

15. 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