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Private Equity and Venture Capital Glossary

Definition Investment Bank

investment banks - An Investment Bank is a financial investment institution which acts as an intermediary, and performs a variety of services which includes underwriting (underwrites the securities by buying all the available shares at a set price and then reselling them to the public. Or the banks may act as agents for the issuer and take a commission on the securities they sell.), usually acting as an intermediary between an issuer of securities and investors (helps companies in raising capital by arranging new bond or stock issues to market), facilitating mergers and acquisitions and other corporate reorganizations, acting as a broker for institutional clients, also responsible for preparing the company prospectus, which presents important data about the company to potential investors, In addition, it handles the sales of large blocks of previously issued securities, including sales to institutional investors, such as mutual fund companies (asset management companies) Unlike a commercial bank or a savings and loan company, an investment bank doesn't usually provide retail banking services to individuals. In this way Investment banks and traditional banks are separated financially because they handle different type of economic transactions.


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