Investment Firms Industry Profile

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.

Activity in emerging markets in the Asia/Pacific region has attracted the interest of companies seeking new investment opportunities. Political uncertainties in some emerging regions, such as the Middle East, can pose risks that outweigh potential returns and cause investors to look elsewhere.

The US investment firms industry includes about 9,000 establishments (single-location companies and units of multi-location companies) with an annual revenue of about $68 billion.

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.

Investment firms compete with other entities seeking investment capital. Competing organizations may include sponsors of public and private investment funds, real estate development companies, and other organizations within the global investment management industry.

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 ...