Types of Finance Companies
Investment banks would be rated as the most important in the world of finance. These banks act as middlemen in the execution of big transactions which involve exchange of securities/shares. So, whether it is helping common investors buy stocks, or helping giant or medium-sized corporations to issue fresh equity, investment banks always play a key role. Investment banks like JPMorgan Chase and Wells Fargo are well-known for their wealth management division which caters to retail as well as institutional investors.
Private Equity Firms
The private equity firms work in a professional way, and are known to execute several billion dollars of transactions in a year. These firms approach cash rich investors to invest their money in their firms and finally, they use this money to buy stakes in privately managed companies. Private equity firms have highly qualified analysts who study the fundamentals and growth prospects of the firms before investing the company’s money in them.
Hedge funds are those funds in which rich global investors invest their money for the purpose of wealth maximization. These hedge funds are managed by professional hedge fund managers who have vast experience in hedging, and have many clients with them. In the United States of America, there are many rules and regulations for hedge funds which make it compulsory for them to have minimum income and hence only the top finance brains in the world are seen actively involved in hedge funds.