۱.Introduction
At a macro level, ‘Investment Banking’ primarily focuses on assisting the capital market in capital intermediation. This involves transferring financial resources from investors to issuers who need them to generate GDP. In the financial market, banking institutions and capital markets serve as the main platforms for institutional intermediation in the economy. Investment banks play a key role in resource allocation, similar to traditional banks.
۲. Definition
Unlike traditional banks, Investment Banks focus on handling large and intricate financial transactions like underwriting, bridging the gap between securities issuers and investors, facilitating mergers and corporate reorganizations, and providing brokerage and financial advisory services to institutional clients. Investment banks are also referred to as Merchant Banks globally. Major investment banks such as Barclays, UBS, and Credit Suisse are well-known worldwide. Some Investment Banks concentrate on specific industry sectors. Additionally, many investment banks offer retail services catering to small individual customers.
In Iran, there are 12 investment bank companies that have licenses from the Securities Exchange Organization of Iran.
۳. Functions and Activities
Investment banks are institutions that serve as intermediaries for a variety of purposes. Their activities usually vary from one institution to another. Most of the services in which they engage tend to be large and complex financial transactions. Investment banking clients are normally governments and other financial institutions as well as institutional clients such as hedge funds, pension funds, and large companies.
Pure investment banks are chiefly responsible for raising funds for businesses, governments, and municipalities by registering and issuing debt or equity and selling these investments on an open market through initial public offerings (IPOs). Investment banks traditionally underwrite and sell these securities in large blocks.
Small boutique investment banking firms may narrow their focus to a small area of expertise. They also facilitate mergers and acquisitions (M&A) of companies through share sales and provide research and financial consulting to companies.
If you want to capture information about investment bank companies in Iran, you can use this website.