There are a lot of Chamas that start small and eventually grow to become a powerhouse investment club rich with assets and capital for investing. One of the secrets of their great success is working with an investment bank. One distinct difference between this type of banking has over normal banks is that it does not give out loans and accept deposits. Investment banking services help investment clubs or corporates that are in need of guidance to the next step in growing their investments. This includes helping Chamas and private institutions. They are like consultancy firms that help you decide on your next investment move. In addition, investment banks offer services such as managing your assets wisely. If you are looking to get into investment banking, it is a must that you should get into this with delicate care. Here are some pointers.
Look at the financial institution you are considering using for your investment banking. Is it stable, or is it constantly entering into buying, selling, or merger agreements with other financial institutions? Both stability and constant change can be good or bad, depending on the success of the courses of action taken. Some of the leading investment banks in Kenya include Dyer and Blair, Dry Associates, Kestrel Capital, among others.
Check to see if the financial institution you are interested in has been connected, either directly or indirectly, with any scandal. If so, it might be best to look elsewhere.
Just because a financial institution that deals with investment banking is well known does not necessarily mean it is the best choice. Ask yourself one question, which one is more financially sound at this time? The lesser-known one or the big-name one? More importantly, which one offers better deals in the long-run?
Ask for examples of previous successes. However, no amount of past success will ever be able to predict any degree of future success in a specific company. The variables are always complicated.
Your Chama involvement
Do you want the financial institution you choose to just take your money and do what they think is best, or do you want your Chama to regularly say on a monthly or quarterly basis?
Starting off in investment banking
Consider when the best time would be to start investment banking. Is it when you are first set up your Chama, or should you wait until you have built up funds?
Consider the fees that may be charged
Are they reasonable, or will paying them take away what you might otherwise have gained from investment returns? This is why looking at different financial institutions is important. Your money may literally earn more at a particular branch.
Hiring a good investment banker can be one of the smartest decisions a Chama can make. The banker will teach you things they couldn’t learn from anyone else and, most importantly, will help them reach their funding targets faster than most any other route. Even if an investment idea isn’t viable, an investment banker is probably the most cost-effective way to find out your concept lacks than any other alternative.
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