A Wall Street saying goes that «capital tends to gravitate towards the most well-treated areas.» Investment banks can help raise capital for companies by allowing financial markets to open and increasing their efficiency. This helps businesses grow as well as individuals flourish, and the society at large improve.
Investment banks offer a wide range services. Some, like research divisions, look at potential companies and prepare reports that include buy and hold recommendations. Certain M&A firms help clients navigate the process of buying or selling a company. They also offer «broker-dealer» services that allow https://dataroomweb.net/data-room-checklist-key-features-for-effective-due-diligence/ institutions to trade securities like bonds, stocks and commodities for cash or other securities (a process known as market-making).
Some investment banks specialize in specific types of transactions. These include IPOs (initial public offerings), follow-on offerings, or bond issuances that are aimed at both corporate and sovereign governments. They may also provide advice on spin-offs or leveraged buyouts that involve the selling of business units by a corporation to its shareholders.
Certain investment banks have a huge Sales & Trading division (S&T), which trades publicly traded securities such as stocks, bonds, commodities, and other financial instruments, for their own accounts and for institutions like mutual funds, insurance companies, private equity fund, etc. This is an essential part of the business because it serves as a source of revenue when other activities, such as M&A or IPOs are not as strong. They also provide «market-making» services, which are essential to the functioning of the financial markets. They serve as intermediaries between people who want to buy or sell securities, and ensure there are enough buyers for every transaction.