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Investment BankingPublished by: First Research, Inc. Published: Oct. 12, 2009 - 10 Pages Table of Contents
AbstractThe investment banking industry in the US is comprised of approximately 3,000 companies, with combined annual revenue of about $100 billion. Major companies include Morgan Stanley and Goldman Sachs. Investment banking is heavily concentrated: the largest 50 firms hold 90 percent of the market. The industry continues to consolidate.COMPETITIVE LANDSCAPE Demand is driven by economic activity that results in company mergers, acquisitions, or public financing. The profitability of an investment bank depends on its ability to accurately assess both the value of a business transaction and the readiness of the market to buy the attendant debt or equity. Big firms have an advantage because large customer transactions require firms with substantial financial resources. Small investment banks can compete by participating in syndications and operating in regional markets or specialized industries. Although labor-intensive, the industry produces very high value: average annual revenue per employee at large firms is under $1 million. The global financial crisis of 2008-2009 dramatically altered the landscape of the investment banking industry. Morgan Stanley and Goldman Sachs, the only large firms still intact, have changed their status from investment banks to bank-holding companies. Both firms still engage primarily in investment banking, but former industry leaders such as Bear Stearns, Merrill Lynch, and Lehman Brothers have either been acquired or have filed for bankruptcy protection. The demise of these firms and the late 2000s recession have likely ushered in a ... Get Full Details About This Report >> |
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