Pitch Book

What is Pitch books in Investment Banking?

Pitch Book is an information layout or presentation that is used by the investment banks, business brokers, corporate firms etc that provides with the firm’s main attributes and valuation analysis which helps the potential investors to decide whether they should invest in business of the client or not and  also this information is known as Confidential Information Memorandum which is used by the sales department of the firm to help them sell products and the services to attract new clients.

Investment Banking Pitchbook is the word most dreaded by the Analysts and Associates in any investment banks. I must tell you that making a Perfect Pitchbook lies the secret behind bagging those million-dollar deals. And that is why Investment Bankers work for a hundred hours a week.

If you happen to go through the Typical day of an Investment banker, you will notice how they work day and night, putting all the numbers together for the perfect Pitches.

PitchBook Simple Example

Suppose your friend wants to buy a new Smartphone. He is new to smartphones and is not sure of the configurations or comparisons. On the other hand, you are an expert in smartphones, and you like to keep yourselves updated with the latest trends, technologies, apps, pricing, features, etc.

Now assuming that your friend seeks your advice on which smartphone to buy?

You agree to help your friend and prepare a rough written draft writing down key features of the best 2-3 smartphones, their configuration, their reviews, best buy price, etc. With this, your friend has a fair idea of which smartphone to buy; he can further decide to go for the suggested smartphone.

Let us compare this example to the Investment Banking example as follows:

Investment Banking Pitch Book Analogy

You: Investment Banker (expert)

Your Friend: Client of Investment Banking firm (who needs advice, help)

Your explaining key features of a smartphone: Investment Banker Pitch

Paper of SmartPhone Features & Comparisons: Pitchbook

The investment bankers talk about how they are best in the industry and give clients all the data and information about a particular deal through an Investment Banking  Pitchbook.

Uses of Pitch Books

#1 – They are Marketing devices

  • They act as a marketing device that is used by all the investment banks around the world.
  • It is indispensable to the investment banks while marketing themselves to the clients.
  • It exemplifies a valuable and comprehensive marketing material.
  • They act as the starting point of initial pitch or sales introduction for the investment bank when it is trying to seek new business.

#2 – Should have Investment Actions well specified

  • It must have a diligent as well as proper analysis of the investment actions of the current or the potential client of the bank.
  • It should be designed and crafted in such a way that it is successful in securing a deal with current or potential clients.
  • The approach of the investment banks while making the sales is highly formalized and official. Often they follow a tailored and highly effective sales strategy.
  • It offers the bank a chance to show and prove why the clients should choose them among the wide variety of financing and other sources of capital.

#-3 Contributors 

  • Many contributors to the Investment bank help in the process of pitch book preparation. It involves analysts, associate, vice-president, senior vice-president, head of the team, and the managing director.
  • Managing Directors are the ones who will bring the initial idea for a pitch. The aim here is to give financial solutions to clients by offering banks products and services.
  • Due to the many ideas for an Investment Banking Pitchbook comes from the Managing Directors, the lower level of the Investment banks is loaded with a tremendous amount of work.
  • It means that the analysts have to make sure that they include the latest company and industry information in this with no analytical or typographical errors.

Step by Step Guide to Creating an Investment Banking PitchBook 

Let us first see one sample PitchBook Example

Pitch Book

#1 – Capabilities and Qualifications of the Investment Bank

  • In this section, the Investment Bank will stress why they are the best in the industry.
  • The information about how they rank with respect to their competitors in terms of the products and services will be given here.
  • You can find the Ranking information for mergers and acquisitions, debt, equity, and other derivative products.
  • This ranking table, in comparison to other Investment Banks firms, is known as the league table rankings.

#2 – Market Updates

This section gives the client information about the current market trends and the environment.

  • Why this section has so much importance as in market turmoil, clients seek the Investment Banks’ thoughts on the direction of the market or the optimal time to do a transaction.

It is important for the investment banks to have a smart perspective about the market situations.

#3- Transaction Section

This section gives the client the bank’s perspective on the following:

  • Potential buyers and sellers in Mergers and Acquisitions
  • Amount of capital that can be raised and it’s pricing
  • Timing and Process for the transactions
  • Valuations for sale or acquisition targets

The following is the primary analysis that you may find in the Transaction section:

a) Comparable Analysis

b) Financial Model

  • The most important skill for an analyst is to Build a financial model. It is the most crucial analytical tool used by the deal team to perform some important analysis.
  • Financial Models are used for Accretion/Dilution analysis in the case of Merger & Acquisition Pitch.
  • In the case of the Debt Issuance Pitch, Financial Modeling is used to show how a debt issuance can be serviced and repaid.
  • In IPO Pitch to see the show, the company’s financial profile will look after an IPO transaction.

Types of Investment Banking Pitch books

Types of Investment Banking Pitch books

#1 – Main PitchBook

These types of pitch books include all the details and information about the investment banking firm. Also, the statistics related to recent deals, profits, successful investments, recent trends, and deals in the market are demonstrated in the pitch book. Hence such a pitch book needs to be updated regularly.

Contents 
  • Organization details- This contains slides, which display the organization details of the respective investment bank, like its vision and mission statement, history, global presence, key management personnel, and size of the company.
  • Deals & Client Lists- Further, it also contains information about the recent deals, sector-specific client list as well as the services provided to them.
  • It may also contain slides portraying the firm’s ranking as compared to competitors.
  • Market Data- This will also include important aspects of the market overview, such as competitor’s performance, current trends & deals in the market.

#2- Deal pitch book

It is created specifically for a particular deal. Such a presentation focuses on demonstrating how the investment bank can specifically cater to their client’s financial and investing needs.

It is used to explain details of mergers & acquisitions (M&A), IPO’s & debt issuance. The deal pitch book may also list down the bank’s prominent achievements and clients, to assure acceptability and potential partnership.

Contents 

#3- Management Presentations

When the client finalizes the deal with the investment bank, management presentations are used to pitch the clients to the investors. Details included in the management presentations are-

Contents of a Management Presentation:
  • Client Specific- This is focused on the current client, and hence it is customized to be more client-specific.
  • Provides Client-specific data- It provides more information about the Client Company, highlights, products and services, market overview, customers, organizational chart, financial performance & growth forecasts.
  • Requires Client Interaction and feedback- Preparation of such a book requires detailed interaction with the client and regular feedback sessions.

#4- Combo / Scenario Analysis

  • An investment bank prepares such a book when the client company isn’t sure whether it wants to go public or sell.
  • It is created by stating both scenarios and showing the tradeoffs between the two.

#5- Targeted Deal PitchBook

#6 – Sell-Side M&A Pitch Books 

  • These are created when a client approaches an investment bank stating that they want to sell themselves and are looking for Potential Buyers.
  • It is specifically customized, stressing the points why the clients should choose that particular Investment bank. These types of Pitch books are more exhaustive and long.

It contains the following information-

  • Potential buyers for the client
  • Bank Overview
  • Positioning Overview (why the bank is more attractive than others)
  • Valuation Summary
  • Recommendations
  • Appendix

#7 – Buy-Side M&A Pitch Books 

It contains similar information like the Sell-Side M&A Pitch Books but differs on the following point-

Points to remember

A pitch book is like a salesman for the investment bank. Hence it needs to be perfect, professional, and at the same time, it should be convincing enough.

Important points that must be incorporated here are-

Structure

  • Strengths
  • Show how your investment bank is different from others.
  • Key Management personnel
  • Must showcase the core competencies of the Investment Bank.

Length

  • It should be concise – only detailing the important points
  • May concentrate on a single concept per page
  • Always make use of appendix
  • Must be as crisp as possible

Case Studies

  • Support your points with case studies wherever possible

Graphs & Charts

  • Use Graphs & Charts to emphasize key points

Look and feel

  • Make a point to make proper use of colors wherever possible but do not overdo it.
  • Should be professional looking.
  • Must leave a lasting impression on the clients.

Anatomy of a pitch book.

  • All the details in the Pitchbook must be accurate and up-to-date.
  • There is no scope for any mistakes that may leave a negative impression on the client.
  • The information should be brief and to the point.
  • It should be simple but must have a professional layout.

Conclusions

If you want to be an Analyst or Associates, you will be spending the majority of your time in creating the Perfect investment banking pitch book. I cannot tell you with 100% assurance that there is just one full-proof way to do a Pitchbook. It usually depends on how the Investment bank wants to portray a particular deal. But one point to remember is that customizing your message according to your client’s Needs and Goals always works!

This article has been a guide to Investment Banking PitchBook. Here we discuss what pitch books are, why they are used, examples, samples along with its types. You can also refer to the following articles on Investment Banking –

Reader Interactions

Comments

  1. MMubaslat says

    Thanks, Dheeraj
    simply amazing

    • Dheeraj Vaidya says

      Thanks for your kind words!

  2. Utsav Baral says

    Sir, your contents are very informative and attractive. I really appreciate the work you are doing.

    • Dheeraj Vaidya says

      Thanks for your kind words!

  3. Ravi says

    Thank you Dheeraj for such a nice post.
    Well i would like to know what level of english language is required for pitch book presentation ? (high calibre or average would do)

    Thanks,
    Ravi.

    • Dheeraj says

      As such the english is more aligned towards financial jargons! Dont’ worry too much on that. Your analysis and graphs should speak up than English language.

  4. Ankush Singh says

    Hi Dheeraj,
    Firstly amazing work with the website.

    I was looking for something specifically on how an IPO pitch book works out. Haven’t found anything exactly on it on the internet – it’s all scattered. Hopefully you can come up with something consolidated soon.

    Thanks and Regards,

    • Dheeraj says

      Hi Ankush,

      thanks. Will try to make one in the future.

      thanks,
      Dheeraj

  5. Jeff Carter says

    Just wondering how you got the energy to always write a great post. Thanks Dheeraj.Simply Amazing

    • Dheeraj says

      Many Thanks Jeff :-)

  6. Kevin G says

    Your blog is highly useful for finance students. I am a frequent reader. Please keep posting more for us.

    • Dheeraj says

      Thanks Kevin! :-)

  7. Sneha Desai says

    I initially though that pitch books are just only books created with matter written in it. Had no idea that actual pitches are given to clients with help of this Pitch books which have lot of information and analysis. Thanks a lot for this article.

    • Dheeraj says

      Thanks Sneha :-)

  8. Gary says

    Hi Dheeraj, thanks for the amazing writeup. Can you please enlighten upon how many days generally it takes to create the Pitch book?

    • Dheeraj says

      Hi Gary,

      The answer depends on the urgency shown by your VP or seniors. In most cases, you may have to deliver the pitch book overnight. In a few cases, you may get the luxury of spending a week or two on pitch book.

      Thanks,
      Dheeraj

  9. Pavel Sumichrast says

    It looks very interesting. I wish you much success.
    Have a nice day.
    Pavel Sumichrast

    • Dheeraj says

      Thank you Pavel. I am glad you liked this pitch book guide.
      Best,
      Dheeraj

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