Investment Banking Present and Past

Investment bankers play a crucial role in capital raising for most medium to large businesses. The investment bank acts as either a broker or an advisor to companies as they decide to go public, raise capital, make an acquisition, or be acquired. Investment bankers provide the necessary skill and expertise to help companies navigate these important inflection points in their life-cycle.  The best investment banks are recognized for their abilites and expertise and are able to charge enormous fees for their services.

Recent History: In recent history, defining and protecting ownership has been a key concern for many companies. As the complexity of modern businesses has increased some of these rights have become more difficult to define and monitor. As companies began to be broken up into shares to be bought and sold, they needed a trusted advisor to guide them through the process. Investment banking was born out of this need. Over the past century, the role of an investment banker has transformed considerably. Instead of simply helping define property rights and facilitate trade agreements, investment banks have come to be involved in every facet of the capital markets. New divisions such as sales and trading,  research, and private wealth management all began to become part of the investment bank in the later half of the 20th century. In the 1980's, investment banking and Wall Street became a craze as private equity investors and "corporate raiders" partnered with investment banks to perform highly levered and lucrative transactions. In recent years, the industry has seen consolidation and increased regulation due to the role investment banks played in the 2007 recession.

Ancient History: While the term investment banking did not occur anciently, a similar function has been served by professionals in various periods of antiquity. For example, in Ancient Rome, dating from the 3rd century BC, a type of multi-owner firm known as "Societas publicanorum" existed. These organziations are some of the first formal "companies" or "corporations" to be recorded. Shares of ownership in these companies were bought and sold by "publicans" or investors. These corporations would complete government projects and receive compensations in return. Special publicans helped facilitate transactions related to these primitive corporations. In so doing, they were essentially performing the role of an investment banker.

Investment banking, and financial services in general, have a rich history and will undeniably continue to develop in the years to come. 

Sources:

"Investment Banking." Interview of Austin Winfield. 30 November. 2014
"Investment Banking: Past, Present, and Future." Alan D. Morrison. Winter. 2007

Păcală, Anca. "The Evolution Of The Company-Idea As A Distinct Form Of Separation An Protection For Business In Antiquity." Journal Of Electrical & Electronics Engineering 4.2 (2011): 77-82. Academic Search Premier. Web. 4 Dec. 2014.