If you don’t know what is Wall Street, check out this post right here.
But basically, Wall Street is a term to reference the Financial World just like how Silicon Valley is a reference for the Technology World.
I will be outlining some of the different firms and people who work and do business on Wall Street.
Note: This is not exclusive to the US, it is existent everywhere in the world.
Investment Banks & Bankers (IPO, M&A, ECM, DCM)
An investment bank is a financial services company that acts as an intermediary in large and complex financial transactions.
For example, if a startup wants to be listed in a stock exchange it typically goes through an Initial Public Offering (IPO), which an Investment Bank will provide financial advise and help complete the transition.
Another example is Mergers and Acquisition (M&A). For example, when Disney wanted to buy some of Fox’s assets in an Acquisition, it needed the advise of an Investment Bank like Goldman Sachs. Click here to understand more about M&A.
Investment banks also do advisory and pricing for Equity Capital Markets (ECM) and Debt Capital Markets (DCM). If Apple wanted to issue more shares or issue more debt they would approach an Investment Bank for their expertise on the matter for a smooth transaction.
Investment banks are nothing like the common commercial bank services you use, like CIMB, Maybank, Barclays etc. But it is not uncommon to see banks with both investment banking and commercial banking. For example, Barclays, JP Morgan, Citibank and Maybank all have both branches of banking within their company.
Asset Managers
Asset Managers are the companies and people that help you manage your holdings of assets. Their main duty is to help and advise clients on how to grow their money while taking an amount of risk that is acceptable.
For example, if the Malaysian Government wanted to grow their savings they could approach a Asset Manager like BlackRock. BlackRock will advise and manage the Malaysian Government’s money according to their needs. As the name suggests, Asset Managers manage assets like stocks, bonds, real estate, infrastructure etc.
Asset Managers do the research and advise their clients on which asset is suitable for its clients which can consist of Governments, Businesses, Wealthy Individuals, Retail Investors etc.
However, it is not uncommon to see Investment Banks having Asset Management as a division within their company. For example, JP Morgan and Goldman Sachs which are Investment Banks also have their own Asset Management division. But traditional Asset Management firms include BlackRock, Vanguard and Fidelity International whose main business is Asset Managing.
Private Equity
Private Equity work in the same ways as Asset Managers, but it is a more “Private Asset Manager” as the name suggests. It is only available to really wealthy individuals, businesses and governments.
Private Equity does not engage in Asset Management of public listed companies’ shares like Amazon, Apple and Volkswagen. It typically consists of private companies, and purchasing their equities (shares). Hence, the name, Private Equity. But, it can also make public companies turn into private ones by buying all shares of a public one, effectively delisting it.
They would seek private companies, and invest their capital in them. Then, they would look to combine these companies, bolster their finances, boost their sales, help develop their technology etc. Private Equity seeks to help these private companies go from a good company to a great company.
Once, that objective is completed, they would want to see returns from their investments through either have that company go public and the Private Equity sells off their shares, Or sell the company to another Private Equity, Asset Manager or Business etc.
Some famous Private Equity forms include Blackstone, KKR and Carlyle.
Part II coming soon.
The Economics Amateur 
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