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The Business of Investment Banking

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The Business of Investment Banking

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

So what exactly do the Masters of the Universe do between weekends in the Hamptons?

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Editorial Rating

8

Qualities

  • Applicable

Recommendation

What exactly do the Masters of the Universe do between weekends at their Hamptons estates? While most of us have a vague idea of what investment banking is, businesspeople need a clear understanding of what goes on behind the Wall Street curtain. This book pulls that curtain aside with a systematic explanation of the businesses, strategies and tools of the major investment banks. Parental advisory: The book features a technically complex subject being addressed by a professor in finance. Some colorful anecdotes or engaging examples might have lightened the mood, but this isn’t exactly Oprah territory here, and getAbstract heartily recommends this solid book. Writing with expertise, Thomas Liaw breaks down the current business of investment banking and examines the changes that are blending the profession with commercial banking and insurance, a process that could reduce the Masters to mere mortal servants of global financial services supermarkets.

Summary

Render Unto Caesar...

The first private equity investor may have been one Marcus Licinius Crassus, a Roman in the time of Julius Caesar. When a dwelling caught fire, Crassus dispatched his agents and firefighters. If they believed the building was worth saving, they offered to buy it at a substantial discount. If the owner accepted, they worked to save the building. If the owner declined, they let it burn to the ground. Clearly, they discovered one sure way to find a motivated seller.

Banking on Investment

Today, thankfully, methodologies have evolved, but investors are still motivated by the same thing that drove Crassus: profits. It’s hard to imagine today’s business world without venture capital, mergers and acquisitions, underwriting, financing, trading and fund management. These vital activities all involve investment banking. As global markets and financial services have grown more integrated, competition has sharpened among investment bankers.

Today’s investment bankers offer one-stop financial services shopping for their clients and provide a major source of revenue for Wall Street firms. The line between commercial and investment banking has ...

About the Author

K. Thomas Liaw  is a finance professor at St. John’s University, and operates a consulting practice in private equity and securities. He has published numerous articles and is often invited to speak about capital markets at executive business conferences. His principal areas of expertise include capital markets, trading, risk management and investment banking. His most recent book is Foreign Participation in China’s Banking and Securities Markets.

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