An investment banker basically act in a capital market capacity to governments and corporations rather than deal directly with business or individual investors. They assist their clients to raise finances in the capital market, assist the activities of take overs, amalgamations and partnerships as well as offer financial advisory services. This implies that when the capital market is performing well, then investment bankers too generate more revenues from all their activities.
When investment banks want to arrange finances for their clients, what they typically do is guarantee deals. That implies that they manage the risk integral to the process through purchasing securities from the issuers then selling them to institutional buyers or the public. They generate revenues by buying securities at a particular price, add a mark-up in sales price of which they compensate on the risk that they take with their client.
Arrangement of finance
Let’s say for instance, a government want to finance the building of one of its railway station or a larger municipal project. The government will seek for an investment bank to issue security bonds and help raise capital for the project. The investment bank in this case will plan the bond issuance, price the bond, issue the bond and eventually sell the bond.
Mergers and Acquisitions
Investment bankers play a huge role when a company take over another one. If a company intend to acquire another company, an investment bank offer advisory services to the company on how to go about the acquisition considering the aspects pricing, structuring and growth after acquisition. An investment bank will value the target company, come up with a price that represent its asset value, then negotiate it with the acquiring company.
Martin Lustgarten is the co-establisher and President of a boutique investment bank, Lustgarten. The boutique is headquartered in Miami, Florida. Martin is also a successful businessman and his firm is the fastest growing investment firm across United States.
Apart from investment banking, Martin Lustgarten participate is a strong supporter of philanthropic causes among them, the popular GoFundMe foundation that raises money from life events to support challenging issues like illnesses and accidents. He is very active in social media maintaining a soundcloud account where he interacts with his clients.
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