Merchant Banking is the direct, negotiated investment of private money into privately or publicly held companies by financial institutions or professional investors. The investors make private investments of equity and, in return, receive private stock that is not registered with financial regulators for trading on an exchange. In a way, they are becoming financial partners of the companies.
Merchant Bankers are looking to the sell side market for upper main-street thru middle market as it is a robust market with the number of baby boomers looking to exit their business. Merchant Banks are well suited for the space and in the next few years you will see clear increases in activety.
Literally, merchant bankers are businessmen who become bankers. Historically, they were successful businessmen offering operational and transactional expertise, together with a deep knowledge of capital markets, to other business owners.
The foundation of merchant banking is a focus on relationships. The nature of the work is the ability to function as a trusted, independent advisor, agent, partner, or principal. A merchant bank is oriented toward long-term relationships.