The investment team is a very important part of an investment bank or asset management institution. It is usually divided into different teams according to function, industry and region to serve customers and execute deals. For example, there may be M&A teams, ECM teams, DCM teams, TMT teams, healthcare teams, China teams, etc. Their main responsibilities include maintaining customer relationships, formulating investment strategies, executing financing transactions, pitching for deals, preparing investment memos, conducting research analysis, etc. The investment committee then makes decisions on major investments based on recommendations from the investment teams.
Products Groups: M&A, ECM, DCM, etc according to different product lines
As mentioned in the reference articles, the investment banking department of an investment bank is usually divided into different product groups like M&A, ECM, DCM and Leveraged Finance. The M&A team focuses on merger and acquisition transactions, the ECM team handles equity financing like IPOs, the DCM team works on debt financing transactions, and the Leveraged Finance team specializes in financing for acquisitions and buyouts using debt instruments.
Industry Groups: TMT, healthcare, industrials, etc
In addition to product groups, most investment banks also divide their bankers into different industry groups or sectors like TMT, healthcare, consumer, industrials and financial institutions. Bankers in each industry group develop expertise in their particular sector and focus on serving clients and executing deals in that industry.
Regional Groups: China team, Southeast Asia team, etc
The investment bank teams are also often separated into different regional groups, especially for those banks with extensive global operations. For example, an Asia investment banking department may consist of a Greater China team, a Southeast Asia team, a North Asia team, an Australia team, etc. These regional teams are responsible for business relationships and deal execution in their respective markets.
The investment committee makes top-level investment decisions
While various investment teams conduct research, analysis and pitch for deals, the final investment decision is usually made by the investment committee (IC). The IC consists of senior executives like the Chief Investment Officer and investment heads. They meet regularly to decide on investment strategies, asset allocation, risk management, and approve major investments for the firm across different product lines and regions.
In conclusion, an investment bank or asset management firm typically divides its investment staff into multiple teams by product, sector and region. These diverse investment teams complement each other in serving clients, generating deals, executing transactions, and conducting research. They submit investment proposals to the firm’s investment committee which makes final investment decisions at the macro level by taking into account different factors and portfolio considerations.