Demystifying Investment Banking: An introduction

Stephen Barnett, former Investment Banker and AmplifyME's Director of Corporate Finance, kicks off the first in a six-part series of blogs designed to demystify the world of Investment Banking. These blogs aim to provide students and graduates with the information and tools needed to make the most informed choices about their future.
May 24 / Rachel Aspinall

Setting the scene 

Let’s start with a question:

What’s the difference between Investment Banking, Corporate Finance, IBD, Advisory and Global Banking? Of course, this is a trick question – they are all terms for (roughly) the same thing.

In finance we have tend to find as many ways as possible to confuse the uninitiated.

So, over the next six weeks we are going to attempt to demystify Investment Banking, taking you on a jargon-free journey through this exciting, highly competitive area of the bank.
Let’s start with a question:

What’s the difference between Investment Banking, Corporate Finance, IBD, Advisory and Global Banking? Of course, this is a trick question – they are all terms for (roughly) the same thing.

In finance we have tend to find as many ways as possible to confuse the uninitiated.

So, over the next six weeks we will demystify Investment Banking, taking you on a jargon-free journey through this exciting, highly competitive area of the bank.

Defining our terms and busting the jargon

Investment Banking is the catch-all term for a division within a bank that helps facilitate, or broker, transactions between companies and investors, companies and other companies or investors and other investors. In return for this service, they get (lots of) fees.


Investment banking can be roughly split in two: Global Banking and Global Markets. The fundamental difference between the two is who pays you – in Global Banking, your client is a company looking to raise funds, or buy another company, or restructure.

In Global Markets (also known as Sales and Trading), your clients are investors (asset managers, hedge funds) looking to buy and sell investments at the best price.

In reality, these two divisions are very different and, by law, should not interact with each other (for example, Global Bankers might hold non-public information about a company that the Sales and Trading teams are not allowed to know about).


Frustratingly, when people talk about Investment Banking, or IBD, they often mean Global Banking – the division of the bank that serves companies seeking to undertake significant and strategic initiatives.

For the remainder of the series therefore, we will use Investment Banking and IBD (Investment Banking Division) interchangeably – our clients are companies, and we are doing fun things like capital raising, Mergers and Acquisitions and restructuring.


As Investment Bankers, you are brokers, helping to facilitate transactions, be it between a buyer of a company, and a seller (Mergers and Acquisitions), the issuer of a bond and an investor (Debt Capital Markets), or an issuer of Equity and an investor (Equity Capital Markets).

Moreover, you quickly become trusted advisors to the leadership teams of companies. You are operating on a strategic level, helping companies execute sometimes transformational (and often risky) transactions. You do a lot of ‘free’ strategic work, helping company management set and execute their corporate strategy, providing industry updates and insight on a competitor’s strategy in the hope that you will land a mandate for some big, fee-paying business (for example, as a bookrunner on a company’s Initial Public Offering).

Investment Banking is the catch-all term for a division within a bank that helps facilitate, or broker, transactions between companies and investors, companies and other companies or investors and other investors. In return for this service, they get (lots of) fees.

Investment banking can be roughly split in two: Global Banking and Global Markets.

The fundamental difference between the two is who pays you – in Global Banking, your client is a company looking to raise funds, or buy another company, or restructure.

In Global Markets (also known as Sales and Trading), your clients are investors (asset managers, hedge funds) looking to buy and sell investments at the best price.

In reality, these two divisions are very different and, by law, should not interact with each other (for example, Global Bankers might hold non-public information about a company that the Sales and Trading teams are not allowed to know about).

Frustratingly, when people talk about Investment Banking, or IBD, they often mean Global Banking – the division of the bank that serves companies seeking to undertake significant and strategic initiatives.

For the remainder of the series therefore, we will use Investment Banking and IBD (Investment Banking Division) interchangeably – our clients are companies, and we are doing fun things like capital raising, Mergers and Acquisitions and restructuring.


As Investment Bankers, you are brokers, helping to facilitate transactions, be it between a buyer of a company, and a seller (Mergers and Acquisitions), the issuer of a bond and an investor (Debt Capital Markets), or an issuer of Equity and an investor (Equity Capital Markets).

Moreover, you quickly become trusted advisors to the leadership teams of companies. You are operating on a strategic level, helping companies execute sometimes transformational (and often risky) transactions.

You do a lot of ‘free’ strategic work, helping company management set and execute their corporate strategy, providing industry updates and insight on a competitor’s strategy in the hope that you will land a mandate for some big, fee-paying business (for example, as a bookrunner on a company’s Initial Public Offering).

The structure of investment banks 

All investment banks are different, however the big ones tend to follow a similar organisational structure. A typical IBD ‘floor’ will consist of product teams and sector teams.

The main product teams are:

  • Mergers & Acquisitions – helping companies buy, sell, dispose and spin off (covered in week 1).
  • Equity Capital Markets – helping companies raise capital through the issuance of new equity (week 2).
  • Debt Capital Markets – helping companies raise capital through the issuance of new debt (week 3).
  • Leveraged Finance – helping non-investment grade companies raise capital through debt issuance (often as part of a Private Equity backed Buyout) (week 4).
  • Restructuring – helping companies and government restructure their debt and organisational structure if they get into trouble (week 5).


Sector teams are a little bit different. They are specialists in a particular sector (Industrials, Real Estate, Healthcare etc.) and maintain strong relationships with companies within that sector, advising on corporate strategy, including capital raising and mergers and acquisitions. We will cover sector teams in week 6.

All investment banks are different, however the big ones tend to follow a similar organisational structure. A typical IBD ‘floor’ will consist of product teams and sector teams.

The main product teams are:

  • Mergers & Acquisitions – helping companies buy, sell, dispose and spin off (covered in week 1).
  • Equity Capital Markets – helping companies raise capital through the issuance of new equity (week 2).
  • Debt Capital Markets – helping companies raise capital through the issuance of new debt (week 3).
  • Leveraged Finance – helping non-investment grade companies raise capital through debt issuance (often as part of a Private Equity backed Buyout) (week 4).
  • Restructuring – helping companies and government restructure their debt and organisational structure if they get into trouble (week 5).


Sector teams are a little bit different. They are specialists in a particular sector (Industrials, Real Estate, Healthcare etc.) and maintain strong relationships with companies within that sector, advising on corporate strategy, including capital raising and mergers and acquisitions. We will cover sector teams in week 6.


Ready to put theory into practice?

Check out our flagship M&A Finance Accelerator delivered in partnership with UBS. Register for the next event below and step into the role of Junior Analyst at an investment bank. 
Check out our flagship M&A Finance Accelerator delivered in partnership with UBS. Register for the next event below and step into the role of Junior Analyst at an Investment Bank.