7 Major Functions of Investment Bankers

Investment bankers are investment professionals who combine financial services industry expertise, analytical prowess, and effective persuasive communication skills to support institutional clients in activities like capital raising and debt advisory services.

The major functions of investment bankers is that they lend their corporate finance services to clients ranging from startups to established organizations and, in some cases, even governments. Whether they work for an investment bank or the investment banking division of an organization, they are key players in the financial growth and development of a business, organization, or other corporate entity. Investment banker is a broad term that includes roles ranging from an entry-level investment banker to a high-level position like executive vice president.

The investment bankers career is sensational  because a successful investment banker enjoy abundant networking opportunities, good salary and the ability to play a highly visible role in companies success stories.

The investment bankers build strong client relationships, an investment banker may be involved in any of the following functions and financial advisory activities for corporate clients.

Major Functions of Investment Bankers

Investment Bankers are professional in helping clients solve some of their most critical financial and strategic challenges. As apart of  Investment Bankers functions, they deliver high quality strategic advice and creative financing solutions to  clients, including mergers and acquisitions, financing, and risk management transactions. Here’s the major functions of investment bankers;

1. Debt and Equity Advisory Services

One of the major functions of investment bankers is debt advisory services, they advise clients on all aspects of their debt and capital needs, helping borrowers and shareholders alike to achieve their financing objectives.

The debt advisor capital markets team provides unbiased advice to businesses on all aspects of their debt and equity capital needs including navigating the complex regulatory requirements of the Stock Exchange and the Financial Services.

 The investment bankers work with privately-owned companies across all industry, credit and size spectrum. They get involved in the early stages of the capital raising or capital restructuring process to understand the needs and develop a comprehensive set of financing solutions that consider the full range of debt and equity products and funding sources.

investment bankers functions to assist management or shareholders with the execution of the solution best aligned to stakeholder objectives.

The Debt Advisory team helps privately-owned and sponsor-backed companies secure debt capital or leveraged finance for organic growth, acquisitions, dividend recapitalizations, and refinancing. The team works closely with clients to optimize their debt structures and secure the best long-term institutional partners for the business, leveraging the talents and expertise of our industry specialists to ensure that our financing strategy and positioning results in maximum credit market receptivity.

2. Corporate Restructuring

The functions of investment bankers also involves corporate restructuring. It is an action taken by the corporate entity to modify its capital structure or its operations significantly. Generally, corporate restructuring happens when a corporate entity is experiencing significant problems and is in financial jeopardy.

The process of corporate restructuring in the investment banking sectors is considered very important to eliminate all the financial crisis and enhance the company’s performance.

They usually concerned with debt financing, operations reduction, any portion of the company to interested investors. In addition to this, the investment bankers are very relevant for corporate restructuring due to the change in the ownership structure of a company. Such change in the ownership structure of the company might be due to the takeover, merger, adverse economic conditions, adverse changes in business such as buyouts, bankruptcy, lack of integration between the divisions, over-employed personnel, etc.

3. Research the Stock Market

Research is one of the primary functions of investment bankers. That’s the reason investment bankers do thorough stock market research such as analyzing a company’s performance, reading the financial statements, and more. Also, they always keep an eye on the stock market which in turn helps you make a profit by giving advisory services such as sales and trade.

Investment bankers perform various stock market research such as fixed income research, qualitative research, equity research, macroeconomic research.

4. Merchant Banking

Some investment bankers offer merchant banking services in several areas such as financials, legal, marketing, and managerial divisions.

A merchant bank is a firm or financial institution that invests equity capital directly in businesses and often provides those businesses with advisory services. A merchant bank offers the same services as an investment bank; however, it typically services smaller clients and makes direct equity investments in them.

Merchant banks mainly work with small scale enterprises that are unable to raise funds through an initial public offering by providing financing, bridge financing, equity financing, and corporate credit products. They also issue and sell securities on behalf of corporations through private placements to refined investors who require less regulatory disclosure.

Large merchant banks place equity privately with other financial institutions by acquiring a considerable share of ownership from companies with a significant potential for a high growth rate to seal the gap between venture capital and public stock.

5. Risk Management

The sensational functions of investment bankers is to also help in minimizing the risks associated with the business. A business is associated with many risks such as business risk, investment risk, compliance risk, legal risk, operational risk and more. Investment banks here figure out all these risks, try to minimize them and find out how they will affect the bank.

Market risk is the most important factor an investment bankers  figure out, they keep an eye on critical factors such as credit risks. Investment bankers also set up a strong team to do a risk assessment.

6. Raising Capital for a Client

The need for investment bankers is extremely large. For instance, the  bankers are responsible for the formation of capital for companies, governments and other entities. Also, investment bankers act as an intermediary between investors and corporations. They perform several activities such as negotiation and structuring of mergers and acquisitions and many more.

7. Project Management 

Project management is “the use of specific knowledge, skills, tools, and techniques to deliver something of value to people.”

In simple terms, project management means the process of leading a team to hit goals or complete deliverables within a set timeframe. Project management involves project documentation, planning, tracking, and communication all with the goal of delivering work successfully within the constraints of time, scope, and budget.

In project management, the investment bankers prepare and oversee a wide range of digital transformation, automation, and migration projects. Banking and finance project managers are indispensable within the organization, the industry, domain, and project management expertise together.

Project managers in the investment banking sector supervise the planning, monitoring, and implementation of long-term and short term projects to develop the project plan which assures that the project is completed on time, within the assigned budget delivering value to all the stakeholders.


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