Investment Banking vs Investment Management — General Differences

Investment Banking vs Investment Management — General Differences Do you know, Investment banking & investment management are two of the most sought-after careers for business and finance undergraduates, promising a high-profile career with great perks and bonuses. However, it would not be possible to make an informed choice without understanding what each of them stands for and the nitty-gritties of what exactly do they have to offer as a career.

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What is Investment Banking?

Investment banks are financial institutions engaged in underwriting, helping corporations issue equity and debt securities through IPOs or FPOs, facilitate Mergers & Acquisitions (M&As) both on buy and sell side of the deal and corporate restructuring along with a wide range of other functions. In short, when a corporation is in need of financing, it seeks help of investment bankers to be able to efficiently execute these major transactions. It is an intensely competitive field and arguably with some of the best perks in the industry.

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Also known as asset management, fund management or portfolio management, it involves assisting individual or institutional investors find suitable investment avenues to help achieve their growth objectives. The individuals who seek assistance of investment managers or asset managers are usually High-Networth Individuals (HNIs). The role of an asset manager is to assist with making investments in equities, fixed income securities, real estate and hedge funds among other

instruments. Some prefer to call it “buy side” as the asset managers are basically required to buy investment products in keeping with wealth creation needs of their clients.