Benefits of Starting Your Own Investment Bank & Investment Fund
Investment Banking sounds like a Wall Street exclusive, for which you’d need an Ivy League degree of some sort, to even pursue it as a career. It just seems too limited to the elite number-crunching group of people, living it up in New York City.
Even starting one feels like a far-fetched dream, with fierce competition from the umpteen industrial players that have been ruling the market for decades.
So, what if we could guide you through the process of ‘HOW to establish your OWN investment banking fund?’. To reap the benefits of centralized finance along with taking advantage of an investment bank for sale or offshore bank for sale? That would be an Entrepreneurial dream come true, right?
But, before you get too excited and leap straight to the benefits, a rundown on the specifics is important.
What does Investment banking entail, after all?
The first thing that probably comes to your mind is an Initial Public Offering or the popular IPO. However, Investment banking is way beyond the scope of IPOs and just raising capital. Investment bankers provide corporations and institutions financial advisory services, aid with Mergers and acquisitions, as well as hostile takeovers.
Investment bankers typically do well when the capital markets are performing well. For investment bankers and their clients, more money and activity means more profitable deals.
This is why investing via an investment bank is great but owning one would have plenty of perks too. And that too, without the interference of bureaucracy and stringent red-tapism.
The management team of BancorpTrust has been in the offshore banking industry since 1990 and has a track record of more than 3 decades of successful Investment Bank establishments. BancorpTrust is here to help you find strategic solutions and offers its finest services in establishing investment banks for its worldwide clientele. Its all-encompassing professional Private Placement Memorandum is included in the sale price of your investment bank and can be used to raise capital for the newly founded investment bank.
You'll also get a professional Trust Agreement and Declaration of Trust so you're covered after the ownership transfer is complete.
Buying an Investment bank for sale
What’s better than starting your own investment bank? It’s buying one that is already on sale. Banks have been sold and merged several times in the past and it has always been for the better.
Just like Bank of America absorbed Merrill Lynch at the brink of the financial crisis, you could save an investment bank with excellent potential.
The acquirer would gain the following:
A ready infrastructure
A negotiated acquisition price
360-degree due diligence of the company
SWIFT code access
There are way more benefits of acquiring one and the funding could be utilized for the expansion and hiring of expert personnel.
2. Buying an Offshore Bank
If you see an Offshore bank for sale, don’t assume that it’s illegal or is meant to carry out illicit activities. An Offshore bank is one that is located outside of the depositor's home country, usually in a low-tax jurisdiction (or tax haven) that offers financial and legal benefits.
So again, acquiring an offshore bank has to be on top of your acquisition list if in case you are planning to diversify.
Some of the pros are:
Offshore banks can occasionally provide access to states that are politically and economically stable. Residents in places where there is a possibility of political unrest will benefit from this since they won't have to worry about their assets being frozen, seized, or disappearing.
Due to fewer overheads and a lack of government regulation, certain offshore banks may operate with a lower cost base and provide greater interest rates than the legal rate in the home nation. The interest spread differential can guarantee greater profits and retained earnings for the development of the institution.
Exposure to a lot of foreign currencies can neutralize the returns overall and maintains stability.
Minimal infrastructure is involved since most of the customers lie overseas and the transactions would be carried out online.
A lot of privileges and incentives are offered by the government when an offshore bank is acquired. This drives in a lot of cash flow into that economy which makes operating in that country fairly comfortable.
3. Earning potential
There’s no bigger perk than having great earning potential. Investment banking involves a lot of money for the services they have to offer.
Advisory fees: Investment banks are meant to have the most up-to-date information about the state of the markets. This is why, when a firm needs to obtain funds, whether through a public offering or otherwise, investment bankers are frequently consulted and charge an exorbitant amount for their expertise.
One of the biggest sources have to be Underwriting Services, this is the process that backs a company when it goes public. An investment bank buys the shares of the company that is meant to be taken public and floats them in the primary market for a higher price. The pricing differential is the key source of profit if the bank manages to sell the entire lot.
Securitization has brought about strings of innovation in the development of financial products, making them highly lucrative, if you play by the book, of course.
Risk Management is the need of the hour and Investment Banks do extend themselves to risk management services for companies that need to get their risk appetites in check. This makes this another lucrative medium and adds great earning potential.
4. As an Investment Banker you can become a part-owner when selling a business on behalf of your clients
Along with providing advisory services and being the mediator between the buying and sell-side, an investment bank can have a stake in a company by being a part shareholder in the investment proposition. This is a rare case where the investment bank is unable to sell the entire proposition and ends up retaining the rest under a firm commitment strategy.
Thus, owning a stake in the company can yield great profits in the long run, while it’s doing well. Never underestimate the power of compounding.
5. Lower taxation via Syndication
Since starting off an investment bank would require a lot of funds and when a risky but potentially amazing acquisition comes forward, it becomes harder to refuse. This is why we have the syndication process to benefit us.
A group of smaller investment banks come forward to pool funds together for the desired entity. The primary advantage here is to downsize the risk factor and offers a bonus benefit- since a syndicate is considered as a newly formed corporation by law, you get a tax reduction. This is then distributed amongst the syndicate partners and you end up paying way lower in taxes.
6. Tax-free status
Your new financial entity will be set up so that you can enjoy tax-free status for the next 30 years. Investing in investment banks for sale may be a smart plan that yields a high return in a short period of time if you have the proper counsel and have the appropriate partners on your side. BancorpTrust is the backing you need to get a hold of any investment bank that goes on sale with experts on your side.
7. Being a market maker for certain Assets
You set bids and ask prices for particular assets on a continual basis as a market maker, and you do so at your own risk. They improve profits while also increasing market liquidity in this way. Other market participants will be able to trade more easily as a result of this.
In a nutshell, market-making makes it easier for investors and traders to purchase and sell, resulting in a smoother flow of financial markets. There may be inadequate transactions and fewer investment activities if market making is not done.
Also, structured derivatives like exotic options are tools that investors are on the hunt for. Offering these tools has the ability to attract high net worth individuals and raise the bar for your investment bank.
8. Access to the European Union
The Investment Bank or Investment Fund's current registered offices established by BancorpTrust are in the United States or the Netherlands, respectively. It is possible to open additional branch offices in Geneva, Switzerland, or anywhere else in the world. You can "passport" through the European Union with your licensed Dutch Investment Fund.
Some other notable benefits would have to include:
Lend and borrow funds
Issue Safekeeping receipts and Promissory Notes backed by real-world assets
Participate in Medium Term Note transactions
Issue and trade Letters of Credit with international financial institutions and diversify your reach across borders
Open and maintain bank accounts with any bank worldwide, including US-based institutions, including trust, escrow, commercial, and merchant accounts, as well as many other advantages
Now that you are well versed and understand the benefits of starting or acquiring your own Investment bank or Offshore bank, it would be quite clear that your own financial entity has a plethora of advantages that could benefit you or the group of investors, looking to embark on this journey.
For a confidential consultation on how to establish your own Investment Bank or Offshore Bank & Capital Trust, please contact: