Investment banking

Indicative content

1. Introduction to investment banking. Definition of IB in the field of banking and financial markets. Definition of the terms investment, investment bank, investment banking.
2. Investment banking in the European Union and the USA. History of the investment banking and regulation. Characteristics of investment banking and models of organization of investment banks in the world. 3 pillars (divisions) of investment banking.
3. Methods of raising capital. Debt financing. Equity financing – initial public offering and seasoned equity offering. The role of the investment bank in the issue process. Methods of placing securities on the market, timing of the issue. Main and secondary investment services.
4. Securities Trading (Sales & Trading). Proprietary trading and trading on client's account. Protection against misuse (Chinese Walls) and the problem of misuse of the inside information within the universal banking model.Types of trades - equity trading and FICC trading. Investment bank as a market maker and liquidity provider
5. Asset Management. Creation of investment and mutual funds and their management. Strategies and breakdown of investment funds. The difference between active and passive asset management and its impact on investment performance, recent trends. Wealth management in Slovakia and in the world.
6. Portfolio management and investments. Creation of the portfolio, revision of the portfolio, measurement of its performance. The problem of portfolio diversification with respect to risk. Modern theory of portfolio creation (effective portfolio boundaries).
7. Project financing. Definition of project financing and the role of the investment bank. Project financing participants. The essence of a special purpose vehicle and its use in project financing. Cash flow modeling, calculation of the debt to service coverage ratio and the essence for the decision-making process within the loan approval.
8. M&A (mergers and acquisitions). Development of M&A and individual waves. The role of the investment bank in mergers and acquisitions. M&A Strategy. M&A motives. Calculation of the change in the value of EPS (earnings per share) after the merger of two companies and its significance and expectations for the investor.
9. Valuation of companies. The difference between the total value of the company and the value of equity and their impact on the valuation of the company. History and basic methods of evaluation. Relative valuation. Discounting.
10. Alternative forms of investment. Characteristics of individual types of alternative forms of investment in terms of risk, return and volume of assets under management. Hedge funds. Private equity. Venture capital. Investing in the real estate market. Commodities.
11. The future of traditional and investment banking. Disruption of traditional approaches in banking. Crowdfunding and cryptocurrencies as a new way of raising capital. BigTech and FinTech and their impact on the financial sector.
12. Investment banking services in the conditions of the Slovak Republic. Current state on investment banking in the Slovak Republic and its future. Asset management, collective investment and project financing.
13. Summary and final examination.