In the recent years, the defense sector, globally, experienced a massive hike due to increase in defense budget in some of the major powers of the world. However, when it comes to the global and commercial aerospace sector, due to various reasons like issues related to production, order cancellations, and other; the growth has slowed down. This also had an impact of the defense sector as well! It has been predicted by the experts that things are going to improve in 2020; however, the two important factors, like innovative technologies and demand for commercial aircraft would play a major role in it.
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The Aerospace and Defense Market
After an incredible hike in the year 2018; A&D or global aerospace and defense industry has experienced a down slide in 2019. The defense sector, at a global scale continues to grow; however, the growth rate of the commercial aerospace sector has slowed down considerably. It is expected that in the year 2020, the A&D industry will be back on track as far as the commercial aerospace sector is concerned, which would help them to recover from the decline experienced in the year 2019.
In this section, a brief insight will be offered on the performance of the A&D industry and would also speculate its growth prospective in the years to come. It would also outline different aspects which can impact this industry, globally.
Here are a few important aspects about Aerospace and Defense Industry
- As far as the commercial aerospace industry is concerned, it experienced a decline as there has been some serious issues with production when it comes to certain models of aircrafts
- The defense industry experiences a steady growth as the military expenses of most of the countries, especially the big ones, have increased considerably. Import and export of defense equipment continues to increase, which is considered to be as one of the primary reasons for the growth of the global defense sector.
- As far as the A&D industry is concerned, the global supply is likely to get disrupted due to changes and alterations in international trade agreements. This can result in the increase of cost
- It has also been predicted that in the year 2020, the rate if investment is likely to increase. Besides, new and advanced technologies would also help to improve the rate of production in 2020.
- Though a lion’s share of credit for the growth of A&D industry goes to the United States of America; however, there are few other countries like India, France, China, the Middle East, Japan and also UK, would come up with significant contribution towards the growth of A&D industry at a global scale.
What is an Investment Banking Firm?
An investment banking firm is a special niche of the banking sector which helps different organizations and also individuals for the purpose of raising capital. Besides, they also offer different types of consultancy services related to financial matters to their clients.
The role of an investment banking firm is that of an intermediary, between the investors and security issuers. These firms buy all the shares which are available at a price estimated by the experts and then resell these shares to the public or sell them on the issuer’s behalf. In the second case, the get commission on every share sold.
As far as investment banking is concerned, it is regarded to be as one of the most complicated of all the financial mechanisms. These banking sectors serve different types of purposes to an array of different business entities. They offer different types of financial services, which are as follows
- Trading of securities
- Proprietary Trading
- Acquisition and Merger advisory, that involves assisting different organizations In the process.
- Leveraged finance is also another important aspect of their operation, where they lend money to different firms for the purpose of purchasing different types of assets and settling of acquisitions.
Apart from these, there are various other types of services which are rendered by an Investment Banking Firm. When it comes to the most complex financial matters which involves buying and selling of shares along with raising fund for huge business operations, these bnking sectors have proven to be very helpful and effective
What Services an Investment Banking Firm provide?
There are four primary types of services offered by investment banks. They are as follows
- Raising of Capital: An investment bank plays a major role in assisting different business organization to raise funds for the purpose of achieving different types of objective; such as acquisition of another company, reduce their debt load, expand their existing operation and for achieving other types of financial purposes. When it comes to capital, it can include some combination of common equity, debt, different types of hybrid securities and preferred equity. One of the main functions of an investment bank is to work alongside it’s client for the purpose of structuring the transaction in order to meet different types of objectives and also to attract new investors
- Sales and Trading: These types of services are mainly relevant to the firms which deal in public trading, and also for those who are planning to go public in the days to come. In this particular section an investment bank provide different types of services like making new offers, publishing different types of research reports and others
- Mergers and Acquisitions: Often, investment banks represent different types of firms when it comes an array of complicated financial processes like divestitures, mergers and acquisitions.
- Different Types of Advisory Services: An investment bank offers a wide range of different types of advisory services which include business valuation, strategic planning, offering assistance in the process of financial restructuring, providing opinion on a particular transaction which contain different sorts of complication.
- Research: The investment banks which deal in large projects, usually have a dedicated team to carry out extensive market research and to gather information about different companies. It is also their task to offer recommendations on whether they should buy stocks or sell them. These reports can also be used internally and also for the purpose of generating revenue by selling these reports in the market.
- Sales and Trading: Big investment banking firms have a separate trading department, whose main job is to execute stock on behalf of their clients. They are also engaged in proprietary trading, where money is invested on securities.
- Asset Management: Another important aspect of their job is asset management. In this department, they help their clients select the right mix of debt instruments, stocks, different types of real estate trusts and others.
- Wealth Management: Offering valuable suggestions and advice to the clients with regards to managing different types of property values, is also a major aspect of the services rendered by the investment banking firms.
These are some of the main services which are rendered by an investment bank. Apart from these, they also offer different other types of services. As mentioned, an investment bank deals in some of the most complex financial operations. Its job is not only to help companies raise fund, but at the same time making sure that they can achieve different other types of financial objectives.
As far as the services of investment banking firms are concerned, they have different wings. These banks have played a major role in the progress and development of defense and A&D sector all over the world.
Top Aerospace Investment Banking Firms
Here is a list of top investment banking firm who have played an instrumental role towards the development of this particular sector
- Madison Street Capital
- BCC Capital Partners
- Focus Investment Bankers
- NewCap Partners Inc.
- XLCS Partners
- WestPark Capital
- NewCap Partners Inc.
- The Capital Corporation
- Houlihan Capital
- Osage Advisors
- Metro Investment Bankers
- Hyde Park Capital Advisors, LLC
- Meridian Capital LLC
- Syed Brokerage & Capital Co.
- BlackTorch Capital
- DelMorgan & Co
- MS Capital Advisors
- Business Capital
- JD Merit & Company
- SDR Ventures
These are some of the top investment banking firms which have been contributing for the progress and development of the aerospace industry. According to a recent report published by World Bank, in the year 2020, the rate of investment in this particular sector would increase by 2.3% compared to the previous year. This is means that latest technology will be introduced in this sector which would increase the rate of production. This particular sector has experienced a massive decline as far as production is concerned in the year 2019. This has been pointed out as one of the major reasons for its descend.
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