Investment banking is a model of business that started many years in the past as a kind of partnership that focused on acquisitions, mergers, underwriting security issuances second market offerings and brokerage. Nowadays, it has developed into a whole service business that involves securities research, proprietary trading, and investment management. This has given birth to investment banks that are financial business entities that work towards helping individuals, corporations and governments raise financial capital by processes like underwriting and issuance of securities.
Investment banking currently entails the FICC services, acquisitions and mergers, trading of equity securities as well as derivatives. Investment banks do not indulge in the receiving of deposits; this is left to commercial and retail banks on insidermonkey.com. In the United States, the Volker Rule enforced in 2010 prohibits investment banks from indulging in activities of commercial banks. As an alternative, investment banks focus on trading and promoting of securities for other securities or cash and provision of advice to organizations involved with buying of investment services. These entities include life insurance organizations, unit trusts, private equity funds, mutual funds and hedge funds.
Most investment banks are divided into two – provision of private and public functions and the usage of an information barrier to separate the two. Private investment banking focuses on the private inside information that cannot be accessed by the public. The public sector of investment banking focuses on stock analysis as well as other kinds of services and information that the general public has no access to. In the United States, these advisors on investment banking ought to have been licensed to commence operation and subjected to the regulations stipulated in the Financial Industry Regulatory Authority and the Securities and Exchange Commission.
One of the prominent and professional advisors in this field of investment banking is Jim Dondero, Highland Capital’s President and Co-founder. A graduate from the University of Virginia and having a bachelors degree of science in finance and accounting, James has been working in the field of credit markets for more than three decades. He is not only a certified managerial accountant but also completed a financial training program offered by JP Morgan.
Between the years 1985 and 1989, James worked with the American Express and was dealing with the management of fixed income funds in more than $1 billion of assets. He later on worked with Protective Life in the post of chief investment officer from its birth up until they had accumulated more than $2 billion of assets.
James Dondero is currently on the Board of Directors for the American Banknote Corporation as well as Metro-Goldwyn-Meyer. He is also the chairman at Cornerstone Healthcare Group, CCS Medical and NexBank. He has knowledge in the management of mortgage-backed securities, derivatives, investment grade corporate, emerging market debt, preferred and common stocks and leveraged bank loans. He has earned the title of Chartered Financial Analyst. Qualified advisors in investment banking assist small and large companies as well as government agencies with advice on investment.