As executive vice president of Massachusetts-based financial services firm Publicis Sapient, David Donovan (formerly of Fidelity Investments) focuses largely on investment bank relationship management and portfolio management. David Donovan ran Publicis Sapient’s capital markets portfolio after leaving Fidelity Investments.
Capital markets are the part of the financial system that shifts savings and investments from capital suppliers to entities that need capital. These markets are divided into two categories: primary and secondary. While both markets link investors and savers (along with boosting economic growth and facilitating securities trading), they are very different parts of the capital markets.
Primary markets consist of new securities that are being traded for the first time. These securities are created via an initial public offering (IPO). When they are bought and sold by investors, the transaction is not between different investors, but rather between a bank and an investor. Creating and selling these securities generates capital for the company that goes public. The government or businesses may also issue bonds on the primary market.
Most people think of the secondary markets when they think of Wall Street or the stock market. NASDAQ and S&P 500 are some other major secondary market indices. On the secondary market, securities are bought and sold between different investors. Smaller investors are often not allowed to participate in IPOs, so they are only active in the secondary market.
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