The Business of Investment Banking

By K. Thomas Liaw | Go to book overview
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The Business of Investment Banking provides a comprehensive description of major activities in investment banking and the trend towards one-stop shopping and globalization. In particular, this book goes beyond the subjects and contents covered in traditional investment banking books. This book provides a comprehensive coverage on subjects that are an integral part of the business but are missing in most other books in the field, such as foreign listing on Wall Street, emerging markets, proprietary trading, repurchase transactions, operations, and money management. This book presents an investment banker's perspective on what the environment is and how to best manage it. It is written to provide information that improves a reader's intuition and background similar to what can be gained through an internship at an investment bank.

The book is designed for use as a professional reference and academic text suitable for business professionals and upper-level undergraduate or graduate investment banking and capital market courses. For practitioners, it demonstrates how decisions in one area affect performance and opportunities in other areas of financial services and thus provides a comprehensive view of managing the investment bank. The objective is to provide professionals relevant and in-depth information in order to compete in the investment banking business. For someone new to the global capital markets, the text describes the full range of investment banking activities and the strategic decision-making process.

The Business of Investment Banking begins in the first chapter with an overview of the investment banking business, not just underwriting and mergers and acquisitions but also proprietary trading, global presence, and money management. The subsequent chapters can be divided into four parts: basic business, global perspective, trading and risk management, and special topics.

Part One (Chapters 2 to 6) introduces the basic business areas. The book first describes in detail the process of venture capital investment and mergers and acquisitions. The process includes sourcing, investigation, negotiation, valuation, letter of intent, merger agreement, legal opinions, and regulatory filings. Investment bankers' fees and venture capital exit strategies are also analyzed. On the subject of underwriting, the mechanics, process, pricing, distribution, and underwriting risks are described. Aftermarket trading is an integral part of underwriting. In discussing the government securities market, it is essential to discuss the primary dealer's responsibility, hedging, and regulation. The primary dealer's bidding strategy at the auction goes beyond the standard fixed-income valuation principle. The intricacy of Treasury coupon rolls and the when-issued transactions are also described. On the subject of municipal bond markets, the coverage offers insights on investment bankers' municipal financing techniques and regulatory compliance. The rules on financial contribution to elected offi


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