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108757 Resource 78777 78860 78860 1133205521127 1136756616822 Controlled Structured Finance and Merchant Banking

Merchant Banking is When a Financial Institution Makes an Equity Investment in a Non-Financial Company

What exactly does merchant banking mean?  First of all, when someone speaks of raising equity, we normally think of registered securities (stock) being sold to the public by an investment banker (stockbroker).  But stock doesn't have to be registered with the SEC to be sold, as long as it is sold privately to very sophisticated and suitable (think: rich) investors.  For example, an angel investor (a private venture capital investor) making an investment in a start-up company buys unregistered stock privately.Merchant banking is when a bank or financial institution privately negotiates with the owner of a company and then makes a private equity investment in the unregistered securities of a privately held or public company.Usually it is the holding company of a bank that is making the investment.  For example, let's say that twenty years ago a few doctors and wealthy investors got together and said, "Let's form a bank".  They first form a bank holding company, and then they form the bank as a subsidiary.  Suppose the bank prospers and makes a ton of dough.  The profits are passed up to the parent company, and now the parent company is sitting on a big pile of money.Now the bank holding company could use the money to make loans, but that is really boring.  The owners of the bank are already rich, and what they really want are even larger yachts.  So they start making higher risk investments in the stock of promising companies.  If the venture fails, no problem.  They will still have plenty of money left.  But if the company succeeds, they might own 25% to 50% of the next Wal-Mart.  They hit a home run.  So merchant banking involves private equity investments. Private equity is a broad term that refers to any type of equity investment in an asset in which the equity is not freely tradable on a public stock market. Categories of private equity investment include leveraged buyouts, venture capital, growth capital, angel investing, mezzanine capital and others.The reason that merchant banking is relevant to those of us in the commercial real estate finance field is that the money for mezzanine loans, preferred equity, and venture equity often comes from merchant banks.By the way, it has been my experience that the term "merchant banker" is often used by flim-flam men trying to pass themselves off as direct lenders.  So few people actually know what the term merchant banking means that these con men seldom get questioned about their legitimacy.  So when you hear that term being thrown around, be careful.  The guy may be legitimate ... but maybe not.You can find hundreds of structured finance lenders on C-Loans.com. 9 application/xml false commercial construction lender commercial construction loan commercial financing commercial loan commercial mortgage commercial real estate loan mezzanine lender mezzanine loan preferred equity C-Loans Commercial Mortgage Lender Databank Find Hundreds of Structured Finance Lenders http://www.c-loans.com/onlineapp Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1; SV1; .NET CLR 1.1.4322) 71.50.240.39 71.50.240.39 GBlackburne false true false false true 198508 false false true false false false true 202052 Resource 198508 173239 173239 1208792681161 1208792681161 Controlled Looking to secure bridge loan

For entertainment group

Assets consist of:cable channel options, Licensing agreements, Production rights, and real estate management contracts 10 application/xml true Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1; SV1; .NET CLR 1.1.4322; .NET CLR 2.0.50727) 127.0.0.1 127.0.0.1 68.61.66.89 false true false false true 78777 blog blogsite/CLoans/web