Investment Banking League Tables
Using investment banking league tables can help you compare the performance of investment banks by market share, M&A business growth, sell-side process efficacy and more. These tables are useful for investors, as well as for analysts, to identify the investment banks most likely to provide good deals for them.
Product groups of investment banks
Usually, investment banks have product groups that focus on specific financial products. They may specialize in leveraged finance, structured finance, asset finance, or mergers and acquisitions. These groups advise companies on specific deal types across a variety of industries.
For example, a Texas-based investment bank might specialize in Oil & Gas industry deals. A New York-based bank might work on mergers and acquisitions in Real Estate, Industrials, or Gaming.
Investment banks are organized with a front office, middle office, and back office. The front office is made up of analysts, associates, and a managing director. The back office includes risk management, information technology, accounting, and human resources. These divisions work together to make sure that deals are handled correctly. The back office also supports revenue-related processes.
Product groups are specialized areas within the corporate finance division of an investment bank. They may also be organized by principal products. The three most common are mergers and acquisitions, equity, and restructuring. Other product groups include leveraged finance, Debt Capital Markets (DCM), syndicated finance, structured finance, and high yield bonds.
In some product groups, the work is relatively simple. It involves updating PowerPoint slides or conducting financial analysis. In other product groups, the work is more technical. The average pay for a Managing Director at a bulge bracket investment bank is just a few million USD per year.
Typical industry groups include Consumer & Retail, Industrials, Media, and Gaming & Lodging. There may also be separate industry groups for Metals, Natural Resources, and Healthcare.
Product groups have different responsibilities. A product group may focus on equity research, which makes buy-sell recommendations. It may also be responsible for advising clients on trading securities, such as equity or fixed income. Equity research may also be organized by a sales and trading division. The sales and trading division may also work on mergers and acquisitions.
Deal teams often consist of a single senior banker and an associate. Managing directors are responsible for approving deal material. Their pay is almost 100% correlated to performance. They also have final say on deal material.
Generally speaking, large banks outperform midsize banks, but that’s not the case everywhere. In Europe, large banks are trumped by their smaller brethren in the grand scheme of things. Likewise, the US is not particularly enamored of big bank banking. The good news is that there are a few viable alternatives in the form of boutique investment banks and boutique hedge funds. The latter may be the best bet, particularly in the US, given the sheer number of options available. Fortunately, most of them are also a good fit for investors and the government. Hopefully, these players will be around for a while.
Obviously, a comprehensive list of players would be a pipe dream, but anecdotal evidence suggests that the industry has been steadily growing over the last few years. In fact, a recent report by Morgan Stanley suggests that the industry’s revenue will grow by roughly 25 percent in 2018. The good news is that the company’s revenue is a reasonable fraction of its total revenue, meaning that the bank is well positioned to meet future growth demands.
Compare firms by sell-side process efficacy
Whether you’re looking for an investment banking firm to perform a merger or acquisition, or to provide financial advisory services, it’s important to compare investment banking firms by their sell-side process efficacy. A sell-side firm is responsible for selling a private company to a buyer, but often, the firm is also responsible for a wide range of other services. This includes preparing bidder lists, marketing materials, and overseeing the closing process. Typically, a sell-side firm’s M&A team will work with a client to identify potential buyers and negotiate a sale.
In order to compare investment banking firms by their sell-side processes, it’s important to consider the firm’s overall investment research team, as well as the firm’s reputation. A firm with a strong investment research team is important to a client’s success in the long run.
- Understanding Business Line of Credit Refinance - April 28, 2023
- The Pitfall of Mortgage Refinance Calculator - April 28, 2023
- finance manager.1476737005 - April 28, 2023