Month: August 2021

Banking

The Benefits of Private Banking

Author ByCFI.co

Private banking is an exclusive service offered to people with a high net worth. The best private bank will give you a dedicated relationship manager and, in some cases, uses a team approach to give you expert advice on a variety of financial subjects.

Clients get access to a range of financial services, which may include financial planning advice, exclusive credit cards, portfolio management, investment strategies, retirement planning, and hedge fund investing among others.

While often used interchangeably, the terms private banking and wealth management don’t refer to the same thing. Wealth management is a broad category that deals with optimizing a client’s portfolio. Personal banking offers personalized care and management of finances for the extremely wealthy.

Do You Qualify for Private Banking?

Being the realm of the rich, private banking is not available to everyone who has a savings or checking account. The specific eligibility requirements vary from bank to bank, but the service is reserved for high-net-worth individuals. Some banks are happy with clients who have six figures in investable assets while others demand eight-figures.

Investable assets are any assets that are liquid or easily liquidated. They may include the money in checking and savings accounts, bonds, retirement accounts, money market accounts, trusts, and stocks. Understandably, many banking institutions don’t make their standards known.

It is possible to qualify for private banking even if you don’t meet the minimum requirements. A good example of an exception to the rules is the children of wealthy individuals. Banking institutions are always looking to the future, specifically wealth transfers. They want to make sure that funds stay with them even after the wealth changes hands.

Young professionals who, based on their education and career path, appear to be on the track to meeting minimum requirements may receive an exception. Commonly referred to as the emerging affluent, they can prove valuable clients for the private bank and wealth management firms in the future.

Should You Become a Private Banking Client?

The concierge nature of private banking is one of the factors that makes it such an attractive product. However, that’s not all it has to offer. Private bankers offer a one-stop-shop for all of your banking needs. That said, here are some of the benefits you can expect with private banking.

1. Dedicated Representative

The main perk of private banking is that you are assigned a dedicated representative, or a team of people, whose job is t understand your circumstances and cater to your financial needs. The representative makes it easier to initiate wire transfers, deposit checks, and more.

You will never have to worry about waiting on hold to talk to the next available representative. Because your dedicated manager has intimate knowledge about your financial situation, you won’t have to repeat your preferences every time you need something at the bank.

2. High Investment Returns

Banking institutions allocate the best-performing staff to the private banking division to manage the finances of high-net-worth individuals. The result is higher investment returns for the clients.

The average rate of returns from private banking investments is 7% to 13%. Sometimes that rate goes as high as 30%. The extensive resources offered by private banking allow clients access to investment vehicles like high-performance hedge funds. You also get expert advice on investment options with high rates of returns.

3. Access to a Network of Specialists

Your dedicated manager has got you covered and will connect you to the right specialists. They will connect you to the best tax attorney, estate advisor, investment analyst, or any other specialist you need. The ability to have your private banker set up meetings with these specialists can be a time-saving perk for you.

For many private banks and wealth management firms, having a comprehensive and multi-disciplinary team of professionals with expertise in different financial areas is the key to business success. It allows them to provide the best wealth advisory services, which is key when dealing with high-net-worth clients.

4. Perks and Discounts

Every private bank offers some perks for their clients as a reward for the large volume of business they bring. Services like estate management, tax preparation, wealth management & investment advice, and corporate checking will be offered at a discount.

The foreign exchange rates are attractive for clients involved in the export and import business. Those involved in real estate will benefit from fast-tracked transaction processing through lead advisors. You will get access to lines of credit at lower interest rates than regular clients.

If opening a savings account, the bank may give you a higher annual percentage yield. From time to time, private banks host exclusive events so that they can interact with their high-net-worth clients. And even with the ongoing pandemic, there are still virtual opportunities like virtual wine tasting to connect.

5. One-Stop-Shop

In addition to discounted products, private banking clients get everything consolidated under one roof. You get enhanced services from a dedicated manager, who acts as the liaison with different departments within the bank. This ensures that you only get the best without having to knock on every door.

6. Privacy

Customer dealings and transactions offered to high-net-worth individuals such as private banking are anonymous. You will have access to proprietary products, and the dealings will be confidential to prevent competitors from selling similar products to the same people.

A culture of privacy is important to the wealthy as publicizing personal information could compromise their business interests. It helps protect them in case of lawsuits involving their investments. For most, keeping personal information private provides a sense of security.

7. Business Benefits

If you are a business owner, a relationship with a private bank can help your business grow faster. You can open your business and personal account with the same private bank, and enjoy lending opportunities and other benefits.

Moving funds from one account to the other will be hassle-free. Not to mention, you get to enjoy promos and discounts offered to regular clients.

Enjoy the Best of Private Banking

If you’re searching online for “private banks near me”, the guide above will help you choose the best private bank for you. Private banking makes it easy for high-net-worth individuals to manage their financial affairs in one place. It’s something to consider if you have over $500,000 investable assets and need the convenience of a bank concierge.

Contact us today!

Finance

Matchmaking Private Finance and Green Infrastructure

Author ByCFI.co Blogger
  • The contrast between the scarcity of investments in infrastructure and the excess of savings invested in liquid and low-return assets in the global economy must be dealt with.
  • Greening infrastructure in emerging and developing economies would benefit from being able to attract greenbacks into the business.
  • Development of pipelines of projects with homogeneous regulations and standards, as well as with minimum mismatch between risks and comfort of private investors to manage them will be needed.

First appeared at Policy Center for the New South (July 7, 2021)

The world faces a huge shortfall of infrastructure investment relative to its needs. With a few exceptions, such as China, this shortfall is greatest in emerging and developing countries.

The G20 Infrastructure Investors Dialogue estimated the volume of global infrastructure investment needed by 2040 to be $81 trillion, $53 trillion of which will be needed in non-advanced countries. The Dialogue projected a gap—in other words, a shortfall in relation to the investment needs foreseen today—of around $15 trillion globally, of which $10 trillion is in emerging economies (Figure 1, left panel). The World Bank has estimated that, for emerging and developing economies to reach the Millennium Development Goals set for 2030, their infrastructure investment would have to correspond to 4.5% of their annual GDPs (Figure 1, right panel).

Infrastructure Gaps

In addition to the need for infrastructure investment, there is a need for that investment to be ‘greened’ as rapidly and extensively as possible, in order to minimize the negative impact in terms of increased global warming. For example, the energy sector must be decarbonized by expanding the use of renewable sources instead of coal. Increases in use efficiency, and the elimination of subsidies for the use of fossil fuels, would be part of this strategy.

Transport is now responsible for 25% of the world’s greenhouse-gas emissions. This must be reduced by shifting transportation to low-carbon options, in addition to investments in energy-efficient equipment, and supporting the transition to electric vehicles and fleets.

A major part of the ‘greening’ will be in cities: improved water supply and sanitation services, changes in energy supply, waste recycling, and greater energy efficiency through better building standards and/or renovation of existing buildings. This transition, as for manufacturing and agricultural activities, will require investment in infrastructure.

A major obstacle holding back such investment is the lack of fiscal space, which is constraining public spending. This problem has been made worse by the fiscal packages adopted because of the pandemic. While the largest advanced economies can afford to increase their public debt, with a low risk they will face deteriorating financing conditions, this does not apply to most emerging economies, let alone low-income countries grappling with unsustainable debt trajectories (Figure 2).

Higher global debt across the world

Consequently, measures need to be taken to expand the options for private financing of infrastructure projects. Indeed, according to data from the Institute of International Finance, over the past 15 years, institutional investors with long time profiles in their assets, such as pension funds, have been gradually increasing their allocations to infrastructure investments and alternatives to fixed income instruments, equity, and other traditional instruments.

Stable and long-term returns from infrastructure projects dovetail well with the long-term commitments of those financial institutions, particularly in the context of declining long-term real interest rates on public and private bonds, as seen in recent decades in advanced countries. Surveys carried out by Preqin show fund managers already pointing to the decarbonization of energy as a factor in attracting private investment to infrastructure.

The biggest challenge is to build bridges between, on the one hand, infrastructure investment needs in non-advanced countries and, on the other, private sources of finance abundant in dollars and other convertible currencies with few opportunities to obtain returns compatible with their requirements on their liability side.

Building such bridges requires the completion of two tasks. First, the development of properly structured projects, with risks and returns in line with the preferences of the different types of financial intermediation, would help close the private financing gap in infrastructure.

Investors have different mandates and skills regarding the management of risks associated with types of projects, and phases of project investment cycles. They demand coverage of risks whose exposure is not adequate or permitted by regulation. The absence of complementary instruments or investors is one of the most frequently identified causes of failure in the financial completion of projects. Figure 3 provides a snapshot of the diversity of instruments and vehicles through which private finance can participate in infrastructure projects.

Taxonomy of instruments and vehicles for inrastructure financing

The constrained fiscal space in emerging and developing countries can be used to mainly cover such risks and enable the building up of investment, rather than replacing private investment: crowding-in private finance rather than crowding it out. National and multilateral development banks could prioritize this instead of financing total investments.

Identifying attractive investment opportunities for different types of investors and combining these perspectives more systematically around specific projects or asset pools is a promising way to fill the infrastructure financing gap. The planning and integrated issuance—with different time profiles—of fixed-income securities, bank loans, credit insurance, and others, for the different phases from project preparation to operation, make that combination possible.

The second task to boost private infrastructure investment in emerging and developing economies is the reduction of legal, regulatory, and political risks. Transparency and harmonization of rules and standards can increase the scale of comparable projects and make it possible to build project portfolios. Non-banking financial institutions often highlight the absence of large enough project portfolios as a disincentive deterring the setting up of business lines focused on the area. This is a particular weakness in the case of smaller countries.

The contrast between the scarcity of investments in infrastructure—particularly in non-advanced economies—and the excess of savings invested in liquid and low-yield assets in the global economy deserves to be confronted. Greening infrastructure in non-advanced economies would benefit from being able to attract greenbacks into the business.

Watch Bridging Private Finance and Green Infrastructure

Otaviano Canuto, based in Washington, D.C, is a senior fellow at the Policy Center for the New South, a nonresident senior fellow at Brookings Institution, a professorial lecturer of international affairs at the Elliott School of International Affairs – George Washington University, and principal at Center for Macroeconomics and Development. He is a former vice-president and a former executive director at the World Bank, a former executive director at the International Monetary Fund and a former vice-president at the Inter-American Development Bank. He is also a former deputy minister for international affairs at Brazil’s Ministry of Finance and a former professor of economics at University of São Paulo and University of Campinas, Brazil.

Banking

The Ultimate Guide to Investment Banking

Author ByCFI.co

The global investment banking industry has skyrocketed over the past few decades. And it is only estimated to grow higher each year. From a whopping $102.84 billion in 2020 to $11.45 in 2021, this lucrative business has tremendous growth potential.

But you may be wondering – what is investment banking exactly? What do investment bankers do, and how does the process work?

We’ve got you covered. In this guide, we walk you through everything you need to know about investment banking. 

What Is Investment Banking?

Investment banking is a division of a financial institution that serves corporations, governments, and other institutions. Investment banks are essentially the bridge between investors and corporations.

They help facilitate communication and achieve established financial objectives.

Investment banks carry out the following services:

Underwriting

Underwriting is the raising of capital or funds to support a particular organization. It is typically provided when a company wants to go public or launch its IPO.

Investment banks help companies do this by selling stocks and bonds to investors. This, in turn, benefits businesses because they have the capital needed for day-to-day business operation and growth.

Mergers and Acquisitions

Investment bankers offer advice and consulting for the M&A process as well. They typically aid in the process from start to finish.

What does M&A involve, you may ask. It is a process whereby corporations find and complete buying over another business.

The investment bank here will negotiate the best deal for the client. They will also use their contacts and networks to find growth opportunities.

Thus, investment banking represents both the buyer and the seller in an M&A deal.

Sales and Trading

In this sector, investment bankers act as dealers for the client. They help procure and seal trades to further the organization’s net capital. 

This process can involve matching up various buyers and sellers.

What Do Investment Bankers Do

Investment bankers are financial advisors to corporations, businesses, and governments. Their success is tied to the success of the capital market. Thus, if the economy is doing well, more money will go towards investment bankers and their clients.

They also have a central role in launching IPOs or initial public offerings. They help with closing mergers and acquisitions, managing final company transfers and sales, and issues stocks and bonds.

Skills Required for Investment Banking

Investment banking jobs are high-stress and come with a lot of prerequisites. Following are some essential skills needed to succeed in the trade.

Financing

Every investment banker has to deal with arranging financing. The companies that banks represent will need funding for projects.

Whether it is building a new office or constructing a highway, the chances are that the corporation has used the services of investment bankers.

The bond will get priced appropriately, documented, and then published to become available for buyers.

Negotiation

M&A is a high-pressure situation that is liable to sudden change. Investment bankers need to be able to keep their cool and manage negotiations with ease through it all.

Negotiations can be lengthy with an ongoing series of offers and counteroffers. Thus, bankers are good at practicing fairness and mediation to ensure both parties get a good deal. There is also a fair deal of relationship management involved in the negotiations.

Financial Modeling

On an everyday basis, professionals in this field carry out financial modeling activities. This includes 3 statement models, discounted cash flow models, and more. 

The process involves skills in analysis and research. Bankers need to anticipate future trends and outcomes into present workings as well. The best investment banks carry out a vast range of data analysis practices to provide better value to clients.

Investment Banking Process

The main aim of the process is to raise money. Below is a step-by-step explanation of how the process works, from start to finish.

Selecting the investment banker: Companies will find the right professional for their needs. They evaluate the individuals based on risk, size of funds, strategy, and more.

Brainstorming: The banker shares their insight on the amount to be raised, securities, and more. They also decide on the strategy and offering price.

Underwriting: The underwriting agreement is carried out.

Selling group: All the members of the underwriting syndicate and other parties form a group. They will manage the distribution of assets and determine how they can reach future investors.

Pricing: This is a sensitive issue. A low price can increase interested parties, but it dilutes earnings. A higher price may be a deterrent for investors, but it keeps the profits more solid.

Distribution: The security is distributed to individual investors. This can be done through the form of stocks, bonds, or more.

Stabilizing: Now that the company has distributed its security, it is time to stabilize it. It should arrive at a consistent price by maintaining a firm position in the market. It should also consistently bring in capital for the issuing organization.

Investment Banking Is an Exciting and Fast-Growing Industry

Investment banking plays a vital role in our economy. Whether it is the Wall Street appeal or just interest in the high profile and compensation for the profession, this career is famous for its high growth potential.

We hope this article provided insight into the exciting investment banking field.

Are you interested in learning more about business, finance, and economics? CFI.co (Capital Finance International) is the resource for you! With news, analysis, and commentary on worldwide markets, we have everything you need to stay informed and updated.

Click here to browse through our Finance articles!

Conferences

UAE to Host International Humanitarian Summit at Expo 2020

Author ByCFI.co Blogger
  • The International Humanitarian Summit will take place on the 30th of March, 2022 and will address major humanitarian issues such as racism, gender inequality, intolerance, and persecution, at the Expo 2020 Dubai.

Dubai (19/08/21) – The International Humanitarian Summit, was launched on the World Humanitarian Day, 19th of August 2021, to be held on the 30th of March 2022, in its mission to solve ongoing issues around the world including COVID 19 challenges and the persisting issues of racism, gender inequality, intolerance, and persecution.

Mr.Dawood Al Shezawi

The International Humanitarian Summit will bring together the international community of intellectuals, governmental institutions, human rights and philanthropic institutions, religious institutions, artists, media professionals, cultural associations and the private sector in order to discuss and shed light on the current concerns that need to be addressed, at the Expo 2020 Dubai.

Today’s crises are larger, more complex, and go on for years at a time. Providing humanitarian assistance has become much more difficult. The International Humanitarian Summit will voice out and discuss these issues in March next year, in order to lead, coordinate, and put efforts towards assistance overseas responding to humanitarian crises, natural disasters and manmade disasters. The International Humanitarian Summit will play a major role in promoting and assisting international humanitarian organizations that can better people’s lives and save more lives.

The United Arab Emirates is proud to host the International Humanitarian Summit, which will shed light on humanitarian workers who are reaching out to the most vulnerable people to save lives and alleviate suffering. In no other time has the generous, bravery, and sacrifice of aid workers been more evident or necessary. Around the world, humanitarian workers haven’t stopped saving lives despite the recent pandemic.

The Covid-19 pandemic was responsible for one of the largest humanitarian crises since the Second World War. Over the past few months, it has severely affected the humanitarian sector. The aid industry has suffered the most severe impact of all the industries affected by the pandemic. Countries from all over the world came together to provide medical supplies and medical professionals, however, other sectors of the aid industry received little support. Even with the global pandemic, the International Humanitarian Summit will continue to voice out issues and be a platform to inspire the world, serving as a catalyst for international crisis response in both diplomatic engagements and humanitarian assistance.

The United Arab Emirates has made its mark at the forefront of countries in the world in providing services and providing humanitarian aid and helping those in need around the world. And to crown this role comes the announcement of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister, and Ruler of Dubai, on Wednesday announced that the UAE would offer Golden Visas to charity and humanitarian aid workers in recognition of their efforts and sacrifices. The announcement to provide long-term residence visas was made on World Humanitarian Day.

In this regard, Mr. Dawood Al Shezawi, Secretary-General of the Board of Trustees, stated about the pioneering role of the United Arab Emirates throughout its history through humanitarian work at the regional and global levels “ The UAE policies put humanitarian and development work at the center, which is evident by the establishment of hundreds of humanitarian projects and institutions. Globally, the UAE plays a leading humanitarian role, dedicating resources and efforts to empowering communities and removing barriers to sustainable development.”

Gender Equality and Women Empowerment are topics that will be explored at the International Humanitarian Summit to enable private organizations and governments in promoting an equal world. Sessions will focus on creating an inclusive environment for women and people of determination within the society.

Utilizing the latest digital technology via Events10x, the International Humanitarian Summit will take place in the form of a hybrid event, and will be a powerful dialogue platform which will discuss vital issues in order to achieve a peaceful, healthy and liveable society based on mutual respect and understanding.

The summit is powered with the most anticipated Global Leaders Debate who will discuss the increased fragmentation around the world due to extremism and intolerance, which play a destructive role in achieving global happiness and prosperity. The purpose of this debate is to bring together international leaders to discuss policies to counter these problems and to propose initiatives to further boost human fraternity and tolerance.

The International Humanitarian Summit will feature the Humanitarian Art and Photography Gallery, which allows artists and photographers from around the world to showcase their work while promoting humanitarian values. Through this, visitors will be able to cultivate knowledge, increase awareness and access leading academic archives. Furthermore, the event will also host a digital exhibition where local governments, private institutions and organizations from respective countries will unveil their humanitarian efforts to virtual attendees.

Humanitarian Stories will provide participants with the opportunity to watch encouraging stories about life-changing initiatives from around the world. By doing so, The International Humanitarian Summit will help improve society, as well as highlight individual and institutional efforts in shaping it.

For more information on International Humanitarian Summit, please contact Vyshnavi Menon,  or visit www.internationalhumanitariansummit.com.

Conferences

Invitation to Participate in the IsDB Group Private Sector Forum

Author ByCFI.co Blogger

Date: 2nd September 2021, Tashkent – Republic of Uzbekistan

It gives us a great pleasure to invite you to participate in the Islamic Development Bank Group (IsDB Group) Private Sector Forum in conjunction with the 46 Annual Board of Governors Meeting in Tashkent —- Republic of Uzbekistan under the theme “Respond, Restore, Restart: Post- COVID Resilience and Prosperity for all”. The Forum will take place at the Tashkent City Congress Hall, Tashkent – Republic of Uzbekistan, on 24 September 2021 from 09:30 to 16:30 (Tashkent time).

IsDB Logo

The main objective of the Private Sector Forum is to highlight IsDB Group activities, services, initiatives and joint solutions in member countries (investment, trade and insurance). The Private Sector Forum shall provide a unique platform to network and establish business relations and partnerships with other leading representatives and counterparts from business community in order to share their related experience, success stories & best practices and to explore together the investment and trade opportunities offered by CIS countries. Furthermore, it will connect business communities in member countries by arranging parallel B2B and B2G scheduled meetings.

The Government of the Republic of Uzbekistan and the IsDB Group, conscious of the challenge linked to the exceptional circumstances posed by the COVID-19 pandemic and cognizant of the safety of all delegates and participants. In this regard, a comprehensive health and safety plan has been prepared, which includes risk mitigation measures, guidelines to manage the flow of participants, specific COVID-19 related hygienic measures, and pre-emptive safety procedures.

In this regard, we are pleased to invite your esteemed organization to participate and provide the necessary media coverage for this forum. We are confident that your presence and active participation in this important event will contribute to the successful achievement of its objectives.

 For further information on the provisional program, registration and logistics, please refer to the Private Sector Forum website (www.IsDBG-PSF.org)

Please accept our profound regards and looking forward to receiving your positive reply at your earliest opportunity.

Yours Sincerely,