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What is Investment Bank Ranking?

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  • Written By: Jim B.
  • Edited By: M. C. Hughes
  • Last Modified Date: 23 September 2016
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An investment bank ranking is a measurement of the effectiveness of investment banks that advise and help manage the finances of both individuals and companies. These rankings are generally awarded by credit rating companies who study the performance of each investment bank over a given period of time. Information used to comprise an investment bank ranking includes customer satisfaction, amount of deals made and the money involved in those deals, and overall market penetration. Rankings are often determined according to the types of clients served by the investment banks in terms of the size of the client companies or the type of business they conduct.

Investment banks are used by companies of all shapes and sizes looking to get the necessary financial assistance to meet their respective goals. The main function of an investment bank is assisting companies looking to secure funds. These funds may come from passive investors or from those looking to merge with or acquire the target company. No matter the reason for needing their services, a company can look to an investment bank ranking to help judge whether the bank in question is the right fit.

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The process of deciding an investment bank ranking first begins with compiling all investment banks into categories based on their clients. For example, there are rankings devoted to banks dealing with small-market companies or middle-market companies. In addition, some rankings are based on the type of industry involved, such as the rankings devoted to banks that deal with technology companies. There are also rankings of investment banks based on their dealings in bankruptcy cases.

Once the different groupings are made, the credit agencies responsible for the ranking begin doing their research. Part of what factors into an investment bank ranking is the success the bank has had in making money for its clients. In terms of mergers or acquisitions, the ranking can be based on the deals the bank has made and the amount of funding secured for its clients. Overall customer satisfaction is another main driver of the rankings.

A company in need of financial assistance can then use an investment bank ranking to decide if the bank in question properly meets its expectations. For example, a small-market technology company just starting out can search the applicable rankings to find a company that rates highly in those categories. Although the rankings are a good starting point, a company in need of an investment bank should still do further research to find out if an investment bank meets its specific needs.

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