How Investment Bankers Make Money

If you are like most people, then you are most familiar with one kind of banking. This is retail banking. This is your local bank that you visit to make deposits, withdraw cash and where you may have set up a direct deposit. This is known as retail banking.

Did you know that there is another kind of banking, known as investment banking? This is another side of banking that involves investing money to turn a profit. Investment banks do some things that regular, retail banks do not. Here are a few of them below.

Investment banks can help corporations as well as smaller firms go through mergers and acquisitions. Your local retail bank probably won’t do that. They may have a separate division or company that would be incorporated as an investment bank do that. Other things that investment bankers can do is assist with restructuring of a company. Restructuring involves changing the management, perhaps eliminating some departments or adding a few departments to make a company more productive or profitable.

Investment banks will also invest directly in companies. They can sometimes purchase a company completely and manage it themselves. Other times, they will have ownership but leave management to the company’s previous owners or hire a management firm to oversee their new asset. Investment bankers also love to purchase equity stakes in companies. Unlike retail banks, investment banks are also free to purchase, sell and trade company stocks on the stock market like a stockbroker. They will also trade commodities such as rice, silver, oil and pork bellies. The goal here is to buy when prices are low and then sell them at a higher price, thus making a profit.

 

The Investment Banker, Martin Lustgarten

Martin Lustgarten is an investment banker who hails from Austria, Europe. He has worked in Venezuela for many years as an investment banker and has made a name for himself there. Mr. Lustgarten holds both Austrian citizenship and Venezuelan citizenship. He is fluent in both German, English and Spanish.

Currently, Mr. Lustgarten operates an investment firm known as Lustgarten Martin. He named the company after himself. Working out of Florida, Martin Lustgarten continues to have many dealings in South America, which is a region that he is an expert in.