Introduction to Public Finance Investment Banking:

Public finance investment banking is one of the less well-known branches of the industry. The fact that it largely pertains to the public sector and the government means that it is most definitely not in the focus of the majority of contenders.

Public finance investment banks' clientele includes governments looking for bond underwriters as well as government-owned companies, non-profits, and educational institutions seeking advice on how to finance their debt and projects.

Introduction to Public Finance Investment Banking:

Public finance investment banking is one of the less well-known subspecialties of investment banking. Since it primarily pertains to the public sector and the government, it is undoubtedly not in the attention of the majority of contenders.

Governments seeking bond underwriters, government-owned businesses, non-profit organizations, and educational institutions seeking guidance on how to fund their debt and projects are among the clients of public finance investment banks.

creating municipal bonds, like the debt that governments issue to fund the construction of infrastructures like bridges, trains, and airports.

Public finance has many different facets, one of which is the underwriting of municipal bonds.

• Goldman Sachs – Includes Public Sector & Infrastructure
• Morgan Stanley – Public finance is included in fixed income
• Jefferies – Public finance is included in investment banking and fixed income at Jefferies.

What does public finance investment banking serve?

State and local governments that borrow money on the municipal bond market would be the clients of an investment banker with a specialty in public finance. Consider the straightforward scenario where a state decides to construct a large bridge over a river, sells bonds to finance the project, charges a toll to cross the bridge, and uses the toll revenue to pay off the bonds' principal and interest over time. years.

Difference between Public Finance and Project Finance and Debt Capital Markets (DCM):

In contrast to for-profit companies, governments, non-profit organizations, and other tax-exempt institutions are more likely to be common clients.

Project Finance: This sector of finance is distinct primarily due to the clients it serves and the more in-depth, cash-flow-level modeling it typically employs.

Debt Capital Markets (DCM) - Because DCM may also provide government clients with advice on the issuance of investment-grade bonds, there is some overlap here.

Leveraged Finance (LevFin): LevFin regularly advises for-profit businesses on the debt needed to finance operations like leveraged buyouts and mergers.

Infrastructure, healthcare, and utilities - You will generally work with for-profit companies in each of these categories, despite the fact that there is a lot of overlap between them.

Exit opportunities in public finance investment banking:

The good news is that moving around within a large bank is quite simple because public finance is entangled with so many other operations within one, including traditional investment banking, sales & trading, direct lending, derivatives, project financing, and more.

If your industry, like healthcare, frequently entails IB-style assignments, a for-profit healthcare organization might engage you for a position in corporate finance or corporate development.

The bad news is that traditional hedge funds and private equity companies do not usually abandon investors.

Banking Career Planning:

You must plan your career if you want to excel in your chosen field. It might be time for a move if your current employment is hindering you from achieving your career goals or if you are dissatisfied with it. There are many positions in the banking and finance sector, and there are opportunities for career progression.