The Role of Merchant Banks

An experienced investment banker with a diverse professional background, Claire Gruppo is an alumnus of Wesleyan University. As the investment bank’s head of M&A, Claire Gruppo is in charge of recruiting professional bankers with significant experience in equity and debt offerings, as well as merchant banking services.

Merchant banks don’t operate like retail or commercial banks. In fact, they were established to serve entirely different purposes. Commercial banks, for instance, provide routine financial services like bill payment processing and don’t make transactions on behalf of their customers. On the other hand, Merchant banks conduct loan services, fundraising services, and underwriting on behalf of their customers, who are typically large (typically multinational) corporations and high-net-worth individuals. They also provide consultancy services.

The types of underwriting that merchant banks typically conduct include foreign investment, real estate, and trade finance. Most of their customers are corporations that seek capital injections but are not yet large enough to attract public investors through IPOs. Merchant banks can help these corporations issue equity and debt securities through private placements.

Since their customers are typically multinational entities, merchant banks are expert facilitators of international transactions. They can advise their customers on the best way to handle these types of transactions and sometimes help them raise funds to finance the transactions and conduct associated underwritings.