Investment Firms

Investment Firms

Brief Excerpt from Industry Overview Chapter:

Companies in this industry take equity positions in target companies, typically owning a controlling interest. Major companies include Berkshire Hathaway, Clark Enterprises, Icahn Enterprises, and Jeffries Financial Group (all based in the US), along with CITIC (Hong Kong), EXOR (Italy), and SoftBank (Japan). The industry also includes the investment arms of major banks, such as Bank of America, Citigroup, Deutsche Bank, JP Morgan Chase, and Goldman Sachs.

COMPETITIVE LANDSCAPE

Demand is driven by the movement of capital throughout the economy. Profitability depends on the ability to identify targets for investment. Large firms have advantages in access to capital. Small firms can compete by specializing in market segments.

PRODUCTS, OPERATIONS & TECHNOLOGY

The main revenue sources for investment firms include trading securities and commodity contract, which accounts more than 50% of the industry revenue. Gains from sold non-financial assets account for about 15%, followed by financial management consulting (10%), loans to non-financial business (10%), rental and leasing of nonresidential spaces (more than 5%), and bundled head-office services to the enterprises (more than 5%).