Sellers / Buyers (buyers are also typically borrowers)
For instance, private individuals (including directors), investors (including shareholders), corporations and public bodies.
Typically banks, private investors, private equity firms or institutional investors seeking a return on their capital. These will base a decision to lend on the potential level of return and the borrower’s credit rating, reputation and performance.
Private Equity Firms / Venture Capital Firms
These aggregate funds from institutional investors and private individuals. They aim to buy businesses at low prices (typically because the businesses are underperforming or undervalued), cut costs, improve efficiency and then subsequently sell at a profit.
Institutions with specialist knowledge that trade securities (such as shares) in large quantities, usually on behalf of others. Examples include pension funds, insurance companies, investment banks and hedge funds.
Financial advisors that typically advise and assist corporations and public bodies looking to raise money. This includes linking clients to potential investors; facilitating the issue of shares or bonds, for instance through helping to price the issue; and analysing the financial state of companies for the purpose of valuation and risk analysis. Investment banks also trade securities such as bonds, shares and derivatives on behalf of clients.
Accountants / Auditors
Help to prepare or verify financial statements and analyse the financial state of companies for the purpose of valuation and risk analysis.
Advise on existing strategies, firm performance and potential future strategies.
Can be enlisted to promote the fact that the parties are acting appropriately, thus minimising negative public attention.
Set and enforce various legal requirements with which parties must comply when executing transactions. Notable examples include the Financial Conduct Authority (FCA) and the Competition department of the European Commission.
Environmental / Social Impact Experts
Assess the environmental or social implications of transactions to help determine whether legal implications could arise.
Incorporated companies must be registered with Companies House and must (under the Companies Act 2006) file information including annual accounts and returns. Companies House must also be notified if certain changes are made to companies.
By Jake Schogger - City Career Series