What is the Investment Banking Division? (IBD)

    Sid Ghosh

    Reviewed by

    Sid Ghosh WSO Editorial Board

    Expertise: Investment Banking | Private Equity

    Investment Banking Division is a sector of an investment bank that is responsible for corporate finance and advisory. It is broadly split into two sectors, products and industries.

    IB Division Explanation

    The purpose of both Investment Banking Division sectors is to provide advisory on transactions, mergers and acquisitions and to arrange (and sometimes even provide) financing for these transactions. The Investment Banking Division area of banking is the subject of the popular book Monkey Business: Swinging Through the Wall Street Jungle.

    Investment Banking Division products comprise the following types of deals:

    • Mergers and Acquisitions (M&A) - advisory on sale, merger and purchase of companies
    • Leveraged Finance (LevFin) - lending money to firms to finance acquisitions
    • Equity Capital Markets (ECM) - advice on equity and equity-derived products (shares, options, futures etc)
    • Debt Capital Markets (DCM) - advice on raising and structuring of debt to finance acquisitions
    • Restructuring - improving the structures of a company to make it more profitable or efficient

    Investment Banking Division industry groups focus on one specific industry (Technology & Media & Telecoms, Financial Institutions, Energy etc) but carry out all the different kinds of deals for firms within that sector. For example, the Financial Institutions (FIG) team will work with clients on raising debt, IPOs, acquisitions etc, but will only work with clients within that sector.

    Some investment banking firms are known for being particularly good at certain sectors, for example Goldman Sachs TMT (Technology, Media & Telecoms), Morgan Stanley M&A, and Bank of America LevFin.

    Related Terms

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    Sid Ghosh

    Sid Ghosh is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. Sid began his career as an investment banking analyst at Rothschild and Co., where he did mergers & acquisitions and helped build the firm's North American Equity Advisory practice. Following the completion of his IB program, he became an associate at Pantheon. Sid then worked as a senior associate at Dunbar Capital, a privately-held alternative investment firm before joining 747 Capital as an associate. Sid graduated from NYU Stern and is completing his MBA at Columbia.. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.