This is a working definition of corporate finance, written by Shaun Beaney of the ICAEW Corporate Finance Faculty in April 2005 and revised January 2011. The faculty welcomes suggestions for additions to and refinements of this definition.
The definition of “corporate finance” varies considerably across the world. In the US, for example, it is used in a much broader way than in the UK – to describe activities, decisions and techniques that deal with many aspects of a company’s finances and capital.
In the UK, the terms “corporate finance” and “corporate financier” tend to be associated with transactions in which capital is raised in order to create, develop, grow or acquire businesses
It is often associated in the UK with some degree of change of ownership in a business, connected to a corporate transaction that leads to the creation of a new equity structure or shareholder base, and the related issue, underwriting, purchase or exchange of equity (and related warrants) or debt.
In the UK, the term generally refers to those who act as advisers on the types of transactions listed above. This may also include sponsors or nominated advisers for IPOs.
Such lead advisers may be from investment banks, accountancy/professional services firms or independent advisory firms (sometimes known as "boutiques"). In some cases, they may also include individual consultants who specialise in such work.
Accountants employed by the buyer of or investor in a business or a specialist investment fund to ensure that the financial workings of the target company are fully disclosed and are in order. The scope of such work can be driven by the requirements of the investor/buyer, or by regulation, and the reports issued can be private or public, depending on the circumstances.
Solicitors who are primarily involved in advising on the types of transaction listed above, including legal due diligence.
Private equity/venture capital professionals engaged in buying, selling and providing finance to businesses.
Bankers, other debt providers and debt-advisory specialists who are principally involved in the types of transactions listed above.
Brokers who advise on and support raising capital for transactions (IPOs, acquisitions, disposals etc.)
Other specialist advisers employed to support the types of transaction listed above, if they are primarily engaged in supporting such transactions. Examples include commercial due diligence, environmental due diligence, insurance and other types of consultancy work.
Directors and executives in companies who primarily focus on the types of transactions and projects listed above, in order to support corporate development.
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