WHAT IS INVESTMENT BANKING?

An investment bank is a financial services company that engages in advisory-based financial transactions on behalf of individuals, corporations, and governments. 

Such transactions are usually classified as investment banking activities mainly serving the business and financial needs and expectations of the different parties involved. The major difference between traditional Banks and Investment banks is that Investment banks dont take cash deposits and receive fees as compensation.

Investment Banking activities are usually classified as buy side or sell side. The sell side involves trading securities for cash/other securities and the buy side involves the provision of advice to individuals and institutions that buy into organizations, private equity funds and mutual funds. Investment Banking also helps individuals and firms to allocate capital resources efficiently towards increasing profits. 

The Investment Banking process is different from traditional banking because they do not hold cash reserves. Investment Banks act as advicers either on the buy side or sell side by engaging in investment analysis to bring the transaction to a Bankable state and financial close. Such investment/bankable analysis may include, market research, financial modeling, due diligence, auditing, securitization, negotiation of fees and implementing legal issues involved.