What is in investment banking?

In this video we explore the roles of the key departments in an investment bank, and hear how they work together to service their clients. We speak to senior bankers in Investment Banking, Global Capital Markets, Sales & Trading, Equity Research, Operations and Technology.

When we think about what investment banks do we simply think that they sit at the intersection of of people and ideas and capital and and that capital can either be money that sits as outside of the stock markets or money that sits within public markets like the stock market or the bond market and within an investment banking we effectively bring that money

To people who need it or people who have ideas and who want to continue to grow so as a bank like morgan stanley we actually facilitate and work with the site that has capital versus the side that would like capital to grow their business many of the biggest tech companies for example that you think of like go skype or facebook that they’ve all started out and

Grown into the great businesses they are today through the use of investment banks to to connect those ideas with capital it’s important to the world of business and and finance because it effectively underpins growth in in those businesses and by definition or extension underpins growth in the economy in terms of what the investment banking division does we work

Predominately with our corporate clients so we’re working on mergers acquisitions sales of businesses that are typically private and they don’t become known publicly until they’re there and ends once we’ve put the building blocks of the deal in place we’ll go to our colleagues in gcm and try to figure out the best way to raise finance for that for that transaction

Global capital markets is all about raising capital and distributing capital for our clients that capital could be debt or it could be equity and our clients could be anyone from a corporation to a bank to a government so the kinds of things that we help our clients with are how should they raise the money which market should they go to which investors are going to

Be most attractive in terms of the price that they offer for the securities that are going to be issued and what is the right approach to the market should they do a private process just approaching a few investors quietly or should it be a large public process we are actually the the front connection point to our clients to give them investment advice and so sales

Will talk to their clients to give them advice of what they should be buying selling shape of their portfolio what ideas morgan stanley has from research concept house and then you’ve got the trading which facilitate the transactions so our traders would be the ones to execute the trade on behalf of the of the clients so the equity research division gives advice to

Institutional investors on which stocks to to buy hold or sell we probably one of the departments that works with the broadest number of people and departments across the firm a good example is an ipo which is which really brings the firm together initially the bankers are speaking to the company we don’t even know that it’s happening and once the company is ready

To come to market then they bring us in then we write a report in order to educate investors on what the company does and what the attractions and what the risks might be for the company and then once the company is ready to sort of announce it to the market then sales and trading get involved and then they organize meetings with institutional investors and we all

Work together to callate the feedback and understand what what the right pricing might be for that for that sock operations in many ways is like the engine-room of the whole bank so everything that our clients do and that our trading desks do touches operations so on a day-to-day basis we process all of the transactions and that the bank undertakes and all the way

From execution through to settlement and then for the whole lifecycle of the trade but probably the most important thing that we do is client asset protection so we look after all of our clients assets and we make sure that we comply with all of those rules globally and so that when our clients do business with us they know that we’re looking after them properly

Technology is incredibly important to morgan stanley it’s viewed as a transformational tool across the whole bank every part of the firm as a technology need need we have needs right across our technical systems other systems that do actual trading – generating reports right across the desktop and mobile devices that our clients are using on a daily basis we have

7,000 employees at morgan stanley working on technology as well as another 7,000 consultants and we develop 80% of all of the technology that’s used by morgan stanley’s although we buy technology we also develop it so we’re an extremely large technology organization for me the most impressive one is to look at where the leaders of the firm have spent their careers

So if you look at the the president of institutional securities or the cfo former cfo or the people that are running fixed income or investment banking today they’ve all come from gcn the thing i’m most proud of about operations at morgan stanley is we’ve got just under five thousand people globally in 41 different locations across the globe which i think is a

Really great thing is it’s a large team and there are loads of opportunities to work in all kinds of different functions globally what is impressive about the sales and trading business is we’ve got fantastic rankings and achievements and awards but i think what is important is the type of person that we’ve got within the business we’ve just finished our global

Volunteer month where we had a hundred percent participation from the morgan stanley directors within sales and trading and so went out to do some volunteer working there in the local community as the markets have picked up we continue to to have a great market position and actually we’ve done almost 300 billion dollars of transactions in europe alone this year

Equity research in morgan stanley is probably it’s probably the best sort of equity research team out there i would say most recently for example we’ve worked on ipos like facebook or alibaba or netflix morgan stanley’s technology budget is about three billion dollars so if the morgan stanley tech division was floated as a separate company it probably would end up on the footsie 100

Transcribed from video
What is in investment banking? By The Gateway