Investment Banking Simplified: Variants Synergized

Investment banking is about synergizing the variants. These variants are open to any industry whether it is manufacturing, hospitality, information technology. It is about capturing the dollars. It is adding one plus one and bringing in three. Investment banking about understands the past analyzing the present and taking decision for the future. The variants for IB can be divided based on-

1- Steady time (a world in which there is a lag between a customer’s need and a market solution)

2- Real time (a world in which the market creates solutions at the same time customers have a need)

3- Zero Time (a world in which the market creates solutions before the customers have expressed a need)

Investment banking is about company evaluation, company acquisition and company growth strategy. For it to happen we need to understand which direction the industry is moving. We are at present in a consolidation. Because of these market forces, industries across the board are having a lot of mergers and acquisitions. Inefficient companies are and will be taken over and efficient companies will become even bigger. At the same time, there might be some smaller companies which will be there serving their niche. They will certainly not have the revenues and the range of services as their larger brethren but they will continue to survive on the basis of their lean operations.

For an investment banking firm simplifying variants is of immense importance. This starts from understanding company’s performance, its hidden value, market share, competition, industry overview etc. Next step is the valuation of information and reaching an acquisition price and acquiring the company. From here it is a strategic decision making whether one wants to build on it or want to follow a strategy of divestiture. Build on strategy will be based on cost cutting, restructuring of management and operations, improving the human resource and other management gamut to bring in solid growth and desired result to the balance sheet. On the other hand strategy divestiture will include strategic sale of whole or part of the assets.

Investment banking brings about synergy, creates values and simplifies the mergers and acquisition and alliances (MA&A). It is a descending stream of pure activity, which brings in dynamic force to the business. It is about thinking differently, as Winston Churchill said that kites rise highest against the wind -- not with it.