Types of Investment Banking

Types of Investment Banking: Investment banking involves the management services and consultation for complex financial transactions of an individual or a business. The main objective of investment banking is to create capital for businesses, organizations, corporations, and governments. 

Investment banks act as intermediaries in large financial transactions for their clients. It primarily advises business organizations on how to generate funds, merge or acquire other businesses, and restructure their operations to be more effective and profitable.   Types of investment banking can be classified into three different categories based on their area of focus and scope.

Enroll Now for Private Banking Courses

Types of Investment Banking 

Investment banking is adopted by investment bankers to guide investors in their best interests and manage their complex financial transactions. It is a very diverse and extensive process. Types of investment bankin are primarily based on their size, focus areas and scope of work.  It can be categorized into the following:

Boutique Banks

These are the types of specialized investment banks that focus only on a particular sector or a type of client. They are easily accessible and more responsive to the requirements of their clients. Although these investment banks offer customized services, they do not require the same amount of power and resources as larger bracket banks. The Boutique banks are further divided into two categories, namely:

• Regional Boutique Banks: They are the smallest in terms of firm size and the size of the deal. They do not offer all the services that are provided by a bulge bracket investment banks. These banks specialize in a particular area such as, handling mergers and acquisitions in a certain market sector.

• Elite Boutique Banks: These investment banks are similar to the bulge bracket banks in terms of the size of their deal, but have a much smaller employee strength in comparison. They operate in multiple sectors but are prominent only in some of them. They also specialize only in a particular sector. Most of the elite boutique banks are a type of regional boutique bank and handle extensive deals for exclusive clients.

Middle-Market Banks

These types of investment banks work on those deals that start at the regional level and rise to the level of bulge bracket banks. In terms of geographic reach, they often find themselves in the middle ground. They have a more prominent presence than the regional boutiques, but are less prominent in comparison to the international reach of bulge bracket banks

Middle-market Banks typically provide all the investment banking-related services that a bulge bracket bank provides. These services include the likes of the debt capital market, equity capital market services, asset management and financing services, and deal restructuring.

Bulge Bracket Banks

These types of investment banks are the topmost investment firms around the globe. Bulge-bracket banks tend to have the highest brand value among all the other banks. These banks also have the largest employee strength and handle the largest deals of some of the biggest corporate clients. 

These investment banks have a wide domestic and global presence and offer their exclusive clients a full range of investment banking services, including financing, trading, equity research and issuance, asset management services, and merger and acquisition services. Most of the bulge-bracket banks also consist of their retail and commercial banking divisions that earn them additional revenue through the cross-selling of financial products.

Investment Banks in India

Investment Banking in India has gone through substantial growth over the past few decades. They are playing a crucial role in financing projects, managing mergers and acquisitions, and supporting capital market operations as the Indian economy expands and international firms enter the Indian market.

The global investment banking market is valued at around $380 billion in 2024, whereas the Indian investment banking market crosses the $1.3 billion mark in 2024. Kotak Mahindra is the leading investment bank in India, with over 7% of its total fees generated by the Indian Investment bankers.

 Enroll Now for Private Banking Courses

Types of Investment Banking Jobs

Investment Banking offers a wide range of jobs in the financial services sector. The types of Investment Banking jobs are based on the different types of skill sets and the level of experience of the candidates. Generally, investment banking jobs follow a structured hierarchy starting from an entry-level position to senior roles. It can be summarized as follows:

• Analyst: It is typically suited for entry-level graduates with a bachelor’s degree. Analysts are tasked with performing financial research, building financial models, preparing presentations, and assisting their seniors. They are important for the collection of information and data for various transactions. 

• Associate: After a few years of experience as an analyst, a professifonal advances to the associate level with added responsibilities. They are tasked with managing deal teams and overseeing the work of the Analysts.

• Vice President: They are responsible for leading teams and managing client relationships while also ensuring smooth execution of the deals. 

• Director: These are the professionals with extensive experience who play a crucial role in high-level client development roles. They are the ones tasked with prospecting new businesses and attracting new clients.

• Managing Director: It is the highest level of investment banking. MDs are the ones responsible for the overall business strategy of the investment firm. They also look to attract new clients and shape the direction of their respective firms.

And if you’re passionate about mastering personal finance, banking operations, or pursuing a career in the financial sector, don’t miss out on PW BFSI Courses. These industry-relevant programs equip you with practical knowledge and skills for the ever-evolving banking, finance, and insurance sectors. PW BFSI Courses help you confidently handle financial products like checking vs. savings accounts, investment options, loans, and more. It’s time to boost your career and financial literacy.