Investment Firms
Description
Companies in this industry take equity positions in target companies, typically owning a controlling interest. Major companies include Berkshire Hathaway, Clark Enterprises, Icahn Enterprises, and Jeffries Financial Group (all based in the US), along with CITIC (Hong Kong), EXOR (Italy), and SoftBank (Japan). The industry also includes the investment arms of major banks, such as Bank of America, Citigroup, Deutsche Bank, JP Morgan Chase, and Goldman Sachs.
Solid growth in emerging markets in Asia is expected to continue going forward and could attract the interest of more companies seeking new investment opportunities, according to the International Monetary Fund (IMF). Political uncertainties in some emerging regions, such as the Middle East, can pose risks that outweigh potential returns and cause investors to look elsewhere.
The US investment firms industry includes about 9,000 establishments (single-location companies and units of multi-location companies) with an annual revenue of about $68 billion.
COMPETITIVE LANDSCAPE
Demand is driven by the movement of capital throughout the economy. Profitability depends on the ability to identify targets for investment. Large firms have advantages in access to capital. Small firms can compete by specializing in market segments.
Investment firms compete with other entities seeking investment capital. Competing organizations may include sponsors of public and private investment funds, real estate development companies, and other organizations within the global investment management industry.
PRODUCTS, OPERATIONS & TECHNOLOGY
The main revenue sources for investment firms include trading securities and commodity contract, which accounts more than 50% of the industry revenue. Gains from sold non-financial assets account for about 15%, followed by financial management consulting (10%), and loans to non-financial business (about 10%).
Investment firms pick investments based on a variety of factors, such as the type of business, the expertise of management, and the company's competitive landscape. Some investors, such as Icahn Enterprises, adopt an activist investment strategy by targeting companies that they believe to be undervalued in the marketplace and take steps designed to unlock value, including tender offers, proxy contests, and demands for management accountability. Though investment firms do not manage the day-to-day operations of the companies they control, they may select the CEO or senior management team and may acquire seats on the boards of public companies.
Solid growth in emerging markets in Asia is expected to continue going forward and could attract the interest of more companies seeking new investment opportunities, according to the International Monetary Fund (IMF). Political uncertainties in some emerging regions, such as the Middle East, can pose risks that outweigh potential returns and cause investors to look elsewhere.
The US investment firms industry includes about 9,000 establishments (single-location companies and units of multi-location companies) with an annual revenue of about $68 billion.
COMPETITIVE LANDSCAPE
Demand is driven by the movement of capital throughout the economy. Profitability depends on the ability to identify targets for investment. Large firms have advantages in access to capital. Small firms can compete by specializing in market segments.
Investment firms compete with other entities seeking investment capital. Competing organizations may include sponsors of public and private investment funds, real estate development companies, and other organizations within the global investment management industry.
PRODUCTS, OPERATIONS & TECHNOLOGY
The main revenue sources for investment firms include trading securities and commodity contract, which accounts more than 50% of the industry revenue. Gains from sold non-financial assets account for about 15%, followed by financial management consulting (10%), and loans to non-financial business (about 10%).
Investment firms pick investments based on a variety of factors, such as the type of business, the expertise of management, and the company's competitive landscape. Some investors, such as Icahn Enterprises, adopt an activist investment strategy by targeting companies that they believe to be undervalued in the marketplace and take steps designed to unlock value, including tender offers, proxy contests, and demands for management accountability. Though investment firms do not manage the day-to-day operations of the companies they control, they may select the CEO or senior management team and may acquire seats on the boards of public companies.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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