Core investment banking activities

Investment banking is split into front office, middle office, and back office activities. While large service investment banks offer all lines of business, both "sell side" and "buy side", smaller sell-side advisory firms such as boutique investment banks and small broker-dealers focus on niche segments within investment banking and sales/trading/research, respectively.

For example, Evercore (NYSE:EVR) acquired ISI International Strategy & Investment (ISI) in 2014 to expand their revenue into research-driven equity sales and trading.

Investment banks offer services to both corporations issuing securities and investors buying securities. For corporations, investment bankers offer information on when and how to place their securities on the open market, a highly regulated process by the SEC to ensure transparency is provided to investors. Therefore, investment bankers play a very important role in issuing new security offerings.[

Front office

Front office is generally described as a revenue-generating role. There are two main areas within front office: investment banking and markets.

Investment banking involves advising organizations on mergers and acquisitions, as well as a wide array of capital raising strategies.

Markets is divided into "sales and trading" (including "structuring"), and "research".

Corporate finance is the aspect of investment banks which involves helping customers raise funds in capital markets and giving advice on mergers and acquisitions (M&A); transactions in which capital is raised for the corporation include those listed aside.

This work may involve, i.a., subscribing investors to a security issuance, coordinating with bidders, or negotiating with a merger target. A pitch book, also called a confidential information memorandum (CIM), is a document that highlights the relevant financial information, past transaction experience, and background of the deal team to market the bank to a potential M&A client; if the pitch is successful, the bank arranges the deal for the client.

Recent legal and regulatory developments in the U.S. will likely alter the makeup of the group of arrangers and financiers willing to arrange and provide financing for certain highly leveraged transactions.