Can anyone explain the difference between an IB and consulting/advisory firm?

Often times I read the news and see "company x was the financial advisor on transaction y for company z."

Is the main difference between an advisory firm and an IBD simply the IBD is able to raise capital for company x AND provide advisory services, while the other can only provide advisory services?

As you could probably tell by now my knowledge in these areas are grey and I'm having a bit of a hard time to really understand the role of the parties involved in an M&A deal.

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Best Response

Yes, you're right. For example, a bank like Citi will be able to provide advisory services AND financing (which, depending on deal size, will likely be syndicated - other banks will chip in) and an independent advisory firm like Greenhill won't provide financing, just advice.

 

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