This document discusses the history and evolution of merchant/investment banking in America, Europe and other parts of the world. It explains that merchant banks originally provided capital to companies through share ownership rather than loans. Over time, merchant banks expanded their services and became more involved in running businesses. The Glass-Steagall Act separated commercial and investment banking in the US in 1933 in response to the Great Depression. While some regulations have been repealed, investment banking continues to play an important role in capital markets globally.
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Capital V #3 After Skype, Wix! A Nasdaq IPO SuccessLuis Galveias
Proprietary magazine of the Luxembourg Private Equity & Venture Capital Association
www.lpea.lu
Index:
5. Editorial
Welcome to capitalV
6. CSS F interview
AIFMD: transitioning to the new law
8. AIFMD
Luxembourg as the next trade mark for Alternative
Investment Funds
10. Interview
Capitalising on the Luxembourg brand
12. Cover story
Mangrove Capital Partners: after Skype, Wix!
16. Regulatory
• Is the Luxembourg Special Limited Partnership
really so special?
• Time is now
20. Domiciliation
• Setting up in Luxembourg
22. Trends
The wisdom of crowdfunding?
24. Life In Luxembourg
• Living in Luxembourg
• University: 10 years of new thinking
28. BusinessWomen
Betty Fontaine: Brewer from father to daughter
30. Event Calendar
What, When, Where
Capital V #4 Creating a Hub for Innovation: Roundtable Venture Capital in Lux...Luis Galveias
Proprietary magazine of the Luxembourg Private Equity & Venture Capital Association
www.lpea.lu
Index
5. Editorial
Welcome to capitalV
6. 3TS Interview
At the forefront of world-changing technology
10. Trends
Crowdinvesting – making the Private Equity industry
accessible for everyone?
14. Roundtable
Venture Capital in Luxembourg: creating a hub for
innovation
18. Microfinance
Bamboo Finance – a pioneer impact investor
with track record
20. Trends
ESG: the growing elephant in the Private Equity room
22. Products
Private Debt Funds – an evolving asset class
25. Regulatory
AIFMD — Navigating the distribution maze
29. Life in Luxembourg
Discover another Luxembourg
34. Event calendar
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LPEA is also changing! Along with the celebration of our 5th anniversary, we are rolling out a new logo that represents our positioning and Luxembourg’s PE/VC toolbox.
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Definition and history of merchant and investment banking, Who is a merchant banker, difference between investment and commercial banking and roles and functions of merchant and investment banking.
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the what'sapp contact of my personal pi merchant to trade with
+12349014282
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when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the what'sapp contact of my personal pi vendor
+12349014282
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just what'sapp this number below. I sold about 3000 pi coins to him and he paid me immediately.
+12349014282
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t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the what'sapp contact of my personal pi merchant to trade with.
+12349014282
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the what'sapp information for my personal pi vendor.
+12349014282
2. MERCHANT/INVESTMENT
BANKING
A merchant bank is a financial institution which provides capital to
companies in the form of share ownership instead of loans. A
merchant bank also provides advisory on corporate matters to the
firms they lend to.
In the United Kingdom, the term "merchant bank" refers to an
investment bank.
An investment bank is a financial institution that assists individuals,
corporations, and governments in raising capital by underwriting
and/or acting as the client's agent in the issuance of securities.
An investment bank may also assist companies involved in
mergers and acquisitions, and provide ancillary services such as
market making, trading of derivatives, fixed income instruments,
foreign exchange,commodities, and equity securities.
2
3. HISTORY OF
MERCHANT BANKING
Merchant banks are in fact the original banks. These were invented in
the Middle Ages by Italian grain merchants. As the Lombardy merchants and
bankers grew in stature based on the strength of the
Lombard plains cereal crops, many displaced Jews fleeing Spanish persecution
were attracted to the trade. They brought with them ancient practices from
the Middle and Far East silk routes. Originally intended for the finance of
long trading journeys
3
5. CONTINUED….
In the 19th century, the rise of trade and industry in the US led
to powerful new private merchant banks, culminating in J.P.
Morgan & Co.
During the 20th century, however, the financial world began to
outgrow the resources of family-owned and other forms of
private-equity banking. Corporations came to dominate the
banking business. For the same reasons, merchant banking
activities became just one area of interest for modern banks.
5
6. 1930S GREAT
DEPRESSION
During the first 10 months of 1930, 744 US banks failed. By April
1933, around $7 billion in deposits had been frozen in failed banks
1930s Great Depression led many countries significantly increased
financial regulation. The U.S. established the Securities and Exchange
Commission in 1933, and passed the Glass–Steagall Act, which
separated investment banking and commercial banking.
This was to avoid more risky investment banking activities from ever
again causing commercial bank failures.
6
7. Current Scenario
Two collapses of the stock market and the sub-prime crisis
have taken their toll on the investment banking industry.
Landmark companies including Bear Stearns, Lehman
Brothers and Merrill Lynch have been adversely affected in
the sub-prime crisis.
Goldman Sachs and Morgan Stanley have moved from pure
play investment banks to become commercial banks after the
repealing of the Glass-Steagall Act.
But still, investment banking remains a key element of our
capital markets.
Goldman Sachs, UBS, Credit Suisse are the major players in
the global investment banking industry
7
11. J.P. Morgan
It is a major provider of financial services
with assets of $2 trillion .
It is the world's second largest public
company based on a composite ranking
(Forbes).
11
13. Goldman Sachs
Goldman Sachs is a leading global investment banking,
securities and investment management firm
Provides services to a substantial and diversified client base
like corporations, financial institutions, governments and highnet-worth individuals.
Goldman Sachs is the successor to a commercial
paper business founded in 1869 by Marcus Goldman. On May
7, 1999, the Company converted from a partnership to a
corporation and completed an initial public offering of its
common stock.
On September 21, 2008, the Group became a bank holding
company regulated by the Board of Governors of the Federal
Reserve System
13
14. Glass-Steagall Act
The Glass-Steagall Act was enacted
during the Great Depression. It protected
bank depositors from the additional risks
associated with security transactions.
The act was dismantled in 1999.
Consequently, the distinction between
commercial banks and brokerage firms
has blurred; many banks now own
brokerage firms and provide investment
services.
14
15. THE MODERN MERCHANTBANK
During the 20th century, European merchant
banks became increasingly involved in the actual
running of the business for whom the
transaction was conducted. Today, merchant
banks actually own and run businesses for their
own account, and that of others.
Since the 18th century, the term merchant
banker has, therefore, been considerably
broadened to include a composite of modern
day skills.
These skills include those inherent in an
entrepreneur, a management advisor, a
commercial and/or investment banker plus that
of a transaction broker.
Today a merchant banker is who has
the ability to merchandise --that is, create or
expand a need –and fulfil capital requirements.
15
16. BRITAIN
Merchant banking in Britain developed partly as a result of
the operation of historical factors and partly in response to
the requirements of trade and industry for their short and
long term needs. Though merchant banks themselves
collect deposits and grant credit to a limited extent,
they act mainly as intermediaries to :
In channelling short term credit from commercial banks
through discount houses to merchants engaged in the
import and export trade or in the marketing of goods in the
domestic market.
In channelling medium and long term capital from those
who wish to lend to those who are in need of funds.
16
17. MBs render a variety of advisory services to individuals
and corporate bodies including such financial institutions
as investment trust and unit trusts, of which they
are the promoters and managers.
MBs therefore from an integral part of the complex
of financial institutions like commercial banks,
discount houses, long-term financial institutions and
capital markets and have therefore established intimate
business relationships with them through daily contacts
and advisory services.
The prominent MBs act as issuing houses, some are
financial bankers, some do foreign exchange
business, some are engaged in bullion business.
All of them do banking in some form by keeping money
incurrent or other accounts for their customers at home
or abroad. This type of banking activity ancillary to other
services, but the keeping of current account on which
their customers draw by cheque is a substantial business
for many of them.
17
18. keeping of securities in safe custody including the
accounts of customers and making and realizing
investments on their behalf. This has led in many
cases to giving advise to customers on their
investments as well as on the management of
pension funds, college endowments and other funds
of a similar nature.
Some of them have an active trustee business which
either a departmentor a separate subsidiary
company handles. They also act as registrars and
transfer agents for industrial companies.
Many MBs have promoted and are managers of
investment trusts and unit trusts. By developing
unit-linked insurance business, they have set up
their own life insurance companies, or have
established business connections with the existing
life insurance offices.
18
19. MBs are active in the following
Manage individual funds individuals, firms
or charitable trusts on a large scale.
Finance foreign trade both in acceptance business
and in the post-war practice of arranging medium
term export credit.
Advise a growing number of industrial companies
not only on how and when to raise capital but also
on their financial affairs generally.
Engaged
in foreign
security
business,
placing American shares in Europe and vice versa,
running European and off-shore trusts thus
concerning themselves with foreign loan business.
Europe accounts for 35% of investment banking
revenues and US 45% and Asia accounted for 20%
in the year 2011.
Investmen
t Bank
19
20. FRANCE
Investment banking was perhaps lagging in France in front
of the City, as this one was the hub of worldwide financial
operations and of globalised forex. But French companies
helped the Paris marketplace to take part to this
international economy.
it could also be argued that French culture is innately
unsuited to investment banking. Lucy Wadham, a writer
formerly married to a French investment banker, postulates
that French culture is all about the achievement of status
through nobility and ideas.
France’s Socialist government for stimulating business
growth by setting up a state-owned investment bank
offering €42bn in financial backing for small and mediumsized enterprises. It is aimed at providing finance and longterm support for business and export development which is
currently lacking for smaller companies
20
21. performs most of the traditional investment banking functions of the group
including mergers and acquisitions advisory, and equity raising operations
such as Initial Public Offerings (IPOs), rights issues, and convertible
bond issues.
It acts on three core businesses that are equity brokerage, equity derivatives
and asset management has an Equity of € 414.1 million (2009)
21
22. GERMANY
Commerzbank, the country's third-largest listed bank,
announced big layoffs in investment banking, where it
made an operating loss of €171m ($210m) last quarter.
That leaves only two German institutions, Deutsche
Bank and Dresdner Bank, with pretensions to
international investment banking.
This is happening at a time when optimists predict a
big increase in demand for investment-banking
services in Germany in the next few years.
Privatisations worth an estimated €50 billion are in the
pipeline.
Corporate restructuring and spin-offs should generate
€1.7 billion a year in mergers and acquisitions (M&A)
fees.
22
23. Spain's Banco Bilbao Vizcaya Argentaria (BBVA) SA is
launching an aggressive bid to expand its investment bank in
Latin America, Asia and the U.S., a move that seeks to take
advantage of its existing footholds and the weaker position
of some rivals.
GENERAL SCENARIO
Europe’s failure to resolve its sovereign-debt crisis will
force investment-banks to be out of business. Deal
making fees may drop 25% this year from 2009.
The Bloomberg Industries European Investment Banks
Index, which tracks UBS, Barclays, Deutsche Bank AG,
and Credit Suisse Group AG, has dropped 4.7% this
year compared with a 13% gain in the 329-member
MSCI World Financials Index.
23
24. CONCLUSIONS
European crisis would have an adverse impact on
Investment banking jobs.
Market Fluctuation Slows Growth
The Impact of Increased Regulation.
More job losses predicted by European banks as
crisis refuses to fade.
Cost cutting to bite in first half of 2013
with more job losses
Impact of sovereign debt crisis expected to
increase.
The industry will be reshaped through
consolidation, asset sales and joint ventures.
Renewed emphasis on increasing cash
reserves and deleveraging
24
25. INVESTMENT BANKING
SOLUTIONS
Provide stability and employment to more
people.
Bringing about economic reforms and
recovery proposals that involves the
following.
direct loans to banks and banking
regulation,
less austerity,
more investment,
increasing competitiveness,
addressing current account imbalances,
mobilization of credit.
25