Fri. Jun 9th, 2023

investment banking sell side

Investment Banking Sell Side

The investment banking sell side refers to a key function of investment banks: helping companies raise debt and equity capital. These bonds and stocks are then sold to investors such as mutual funds, hedge funds, insurance companies, endowments and pension funds.

The sell side also facilitates the trading of these securities. This involves arranging the sales, marketing via roadshows and distribution to institutional clients.


Investment banks serve clients from a variety of sectors, including government agencies, pension funds and university endowments, large corporations and high net worth individuals. They provide strategic advice and assist in facilitating mergers and acquisitions and managing complex financial transactions.

They assist companies in raising debt and equity capital by marketing securities to institutional investors. They also facilitate trading between investors of securities already trading on the secondary market, helping clients to match their needs with buyers.

An investment bank’s research division conducts research on stocks, bonds and other investment securities. The team focuses on macroeconomic trends, market and industry analysis, and other factors that affect the price of a particular security. Its analysts recommend buy or sell recommendations and 12-month price targets for a given security.

Another function is to assist firms in raising debt and equity capital by issuing securities that are purchased by institutional investors, such as mutual funds, hedge funds, insurance companies, endowments and pension funds. Those securities are then distributed to the firm’s clients, who trade them through the investment bank’s sales and trading team.

The primary function of an investment bank is to help its clients raise capital and acquire or sell their business. During that process, the investment bank will advise the client to negotiate on its behalf and work with the buyer’s team to ensure that the transaction proceeds smoothly.

To succeed in this role, an investment banker must be able to develop and communicate a strong vision for a specific client’s long-term goals and objectives. This vision allows them to spot opportunities for short-term and long-term growth.

They may also be involved in the preparation and review of financial models to value securities for capital raising and M&A transactions. They must also have a thorough understanding of the client’s industry and global markets.

When it comes to financing transactions, the investment banker must be able to accurately estimate the value of a potential acquisition and determine the best ways to structure and facilitate the deal. They must be able to find the right buyer for the client’s assets, while also negotiating a fair and competitive price.

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Deal flow

In investment banking, the sell side is responsible for helping companies raise debt and equity capital. This function includes marketing the company’s securities, distributing them to investors and making sure they are available on the secondary market. In addition, the sell side facilitates the sale of these securities to institutional buyers and investors.

Traditionally, the investment banking firm relies on its existing client network and reputation to source new deals. Its sourcing team may also use proprietary deal sourcing strategies to find prospective clients. This strategy is often labor-intensive, as it requires accessing the business owners in its immediate network, screening inbound leads and speaking to investment intermediaries.

However, technology has changed the way investment bankers are able to source deals. For instance, financial technology companies have developed a range of tools that enable business owners, advisors and private equity firms to post their mid-market sell-side listings and buy-side mandates online and get connected with the right parties.

The sourcing team can then monitor and track the deal pipeline from start to finish using software that provides comprehensive reporting. This can also enable them to build a customized buyer list that is tailored to their needs and preferences.

Another strategy for generating deals is to build a large network of business owners, startups and referral sources. This can be done by attending events or conferences, giving speeches and writing blogs. Additionally, virtual platforms such as AngelList and Kickstarter are great ways to find companies with ideas that could interest investors.

Finally, investment bankers can help their clients develop an exit strategy for their companies. This includes negotiating the terms of an initial public offering (IPO) and other options for selling their company.

While the internet has made a great difference in the ability of companies to reach potential buyers, most M&A deals still come from a handshake or a referral. For this reason, investing in social media advertising is not always an effective solution to generate deals.

Regardless of how you approach generating deals, the key to success is finding the right technology to maximize your efforts. The right solution will allow you to easily identify opportunities to amplify your deal flow strategies and close quality deals faster.


The investment banking sell side is a group of specialists who assist corporations and businesses in raising capital by selling securities, such as debt and equity. They perform financial modeling to evaluate a company and determine the price that they believe potential investors will pay. These analysts then help the companies to market their shares and services to the investors.

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The main function of an investment bank is to help firms raise debt and equity capital from institutional investors such as mutual funds, hedge funds, insurance companies, endowments, and pension funds. They also provide advice and research to clients on a range of issues, from mergers and acquisitions (M&A) to asset management.

In secondary capital markets, investment banks’ global markets divisions execute trades on behalf of buy-side and other institutional investors. They also find and match buyers with sellers of securities.

A key component of this work is research, which focuses on financials and annual reports. These people communicate their insights to clients on both the ECM and DCM desks, helping them make better decisions about investments and transactions.

Similarly, buy-side research focuses on identifying and evaluating opportunities for acquisition by strategic acquirers or private equity firms. This involves analyzing potential deals, preparing marketing materials for them, and assessing the integrity of the deal.

As with private equity firms, sell-side investors typically trade independently, but working with an investment bank allows them to gain access to the bank’s extensive industry experience, special tools, and resources. The investment banker’s job is to leverage these resources and streamline and support the transaction.

It is also the responsibility of the investment banker to ensure that the company is able to meet their financial obligations. This often means performing due diligence, which can last for up to three months.

Many modern firms are using data to streamline and accelerate the process of sourcing deals, ensuring that they close properly, and getting the best possible outcome for whichever side of the deal they represent. They can use specialized M&A software to manage the entire lifecycle of a deal.


One of the most commonly asked questions is, “Do I want to work on the buy side or sell side?”

The answer is that both are very rewarding career paths with great earning potential. However, there are some important differences between the two sides of the business that you need to know before deciding which route to take.

In general, the buy side involves advising clients on strategic transactions such as mergers and acquisitions (M&A), divestitures, restructuring, and other similar corporate actions. They typically charge fees based on their clients’ assets under management (AUM) and may also charge a percentage of the revenue from the transaction.

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As for the sell side, their main function is to help companies raise capital through debt and equity offerings. They then sell these securities to institutional investors like mutual funds, hedge funds, insurance companies, endowments, and pension funds.

These types of deals bring in a lot of money for the firm and their investment bankers, so it is no wonder that they are able to offer a high level of compensation to their staff. This includes a large amount of discretionary compensation, such as stock and deferred bonuses, as well as employee benefits such as health care and vacation days.

Compensation for this type of role is largely dependent on your performance as an analyst. In the early years, first-year analysts can receive a sign-on bonus of $5-15k, and then as you progress, your base salary will increase. In addition, you can earn a significant bonus pool that is largely based on your team’s performance and the bank’s overall deal flow and financial results.

Regardless of the size of the compensation package, the most important aspect of an investment banking sell side role is your ability to find and close lucrative deals. The amount of capital you can bring in for the firm can be substantial, and the amount of commissions you can make on these deals can also be significant.

The compensation that you can expect for this career path will vary depending on where you live and the kind of bank you work at. For example, New York and London investment banks have significantly higher salaries than those in Asia or Singapore.

Jeffrey Augers
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By Jeffrey Augers

Jeffrey Augers is a highly skilled and experienced financial analyst with over 12 years of experience in the finance industry. He has a proven track record of delivering exceptional financial insights and recommendations to clients, empowering them to make informed decisions and achieve their financial goals. Jeffrey holds a Bachelor's degree in Finance from the University of Michigan, and an MBA from the Wharton School of Business.