Investment banking involves provision of services such as merging and acquisition and capital sourcing. It also deals with security underwriting. Investment banking is distinguished from commercial banking.
This is a private company offering financial related services to governments, individuals and corporations. These services, as above indicated, include raising capital essentially by representing a client as his/her agent in security issuance. Investment banks can also provide ancillary services such as trading equity securities, market making, and trading derivatives.
Up until 1999, there has been a separation between investment banks and commercial banks,in the US, by virtue of the Glass- Steagall Act of 1933. This separation has not been witnessed in other developed countries such as the G7 countries. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, through the Volcker Rule, asserted that there were institutional separations between the two banks.
Sell and Buy Side
In investment banks, the two lines are: sell side and buy side. On the sell side, securities are traded for cash or for security promotion like underwriting and research, or other securities. The buy sideentails advising of institutions that come to buy investment services. The buy side entities include hedge funds, mutual funds, unit trusts and companies in the business of life insurance.
In some places, there exists a Chinese wall between the private functions and the public functions of the investment bank. Indeed, the private section of the bank deals with information that should not be disclosed as it is insider information protected by law. The public area on the other hand works on such things as stock analysis.
Martin Lustgarten is an investment banker of repute. He is a citizen of both Austria and Venezuela. As a champion of international investment, he has invested in various countries. This allows him to benefit from local investment and other opportunities from other abroad investments.
Lustgarten has a diverse portfolio expanding to other countries.He encourages clients to do the same as this is good for expanding wealth. Martin encourages investment in recovering economies as they not only offer opportunities but stability. Martin’s keen eye on the market trends allows him to get the best deals for clients.