Investment Banking as a Career
Description of the Job
The primary role of an investment banker is raising capital for clients by issuing debt or equity. This career also includes assisting clients with mergers and acquisitions (M&A) deals and providing advice regarding other potential investments, such as derivatives (futures, forwards, swaps, warrants).
Fast Facts
- Number of hours per weekAverage of 75+, can get to 100+ when busy
- Average starting pay85-100k with huge bonuses of $30k+
- Amount of travel requiredGenerally little for junior bankers
Roles & Responsibilities
- Serve as an essential resource when a company holds an initial public offering (IPO) to sell stock to the public
- Help broker M&As, lending their expertise to ensure operations go smoothly
- Serve in advisory roles to assist in finding the best opportunities when clients seek investment opportunities outside their realms of expertise
- Work with management teams to market and sell companies, find potential targets to acquire, and make deals go through
- Recommend the best terms and timing for a capital raise and then market that debt or equity issuance to investors
- Structure equity and debt deals (stocks and bonds)
- Finding qualified investors with the capital to invest into new deals
Skills Needed
- Analytical skills: Employees must have strong analytical, numerical, and spreadsheet skills.
- Team player: Individuals must possess excellent team leadership and collaboration skills.
- Interpersonal skills: Candidates must have excellent communication and socialskills.
- Time and project management: Investment bankers must be able to manage both time and projects well.
- Hard worker: The investment banking role requires commitment, dedication, and high energy.
- Confidence: The job requires individuals to have self-confidence and an ability to make difficult decisions, usually while under a deadline.
Steps to Enter The Field
- Many investment bankers enter the industry by participating in internships with investment banks during their time as undergraduate students. Although an internship is not required to enter the field, it is an excellent way to get started.
- Most individuals who end up working in this field have a degree in Accounting, Finance, or Economics.
- After graduating with a bachelor's degree, it is possible to begin working as an investment banking analyst which includes conducting research and producing analytical reports for more senior staff members.
- Working as a financial analyst in a wealth management firm, bank, hedge fund, or another financial organization is also a good way to begin building experience.
- Candidates with a master's degree but little experience is also considered to be a strong potential contestant for junior level positions.
- There are many ways to prepare for the lengthy interview process that applicants face. Individuals can prepare on their own, but there are also plenty of resources and programs available to help out people (resources below)
Landscape of the Field & Companies in the Field
- Top firms include: JPMorgan Chase, Goldman Sachs, BofA Securities, Morgan Stanley, Citigroup, UBS, Credit Suisse, Deutsche Bank
- There are many smaller boutique investment banks as well. There is less brand awareness for them, but may open more opportunities because of the smaller size, along with less structure
- There are several industries that fall under the umbrella of investment banking. Within an investment banking division, bankers are typically bucketed into two groups: product and industry. The three most common product groups are mergers and acquisitions (M&A), restructuring, and leveraged finance. Common industry groups include Consumer & Retail, Energy and Utilities, Financial Institutions Group (FIG), Healthcare, Industrials, Natural Resources, Real Estate / Gaming / Lodging, Technology / Media / Telecom (TMT)
External Resources to Learn More & Develop Skills
- There are many resources available for the rigorous interview process for Investment Banking. Some of the top free resources include:
- Wall Street Prep: Overview of the IB interview and How to land an IB interview
- Wall Street Oasis: Forum on Investment Banking Interview prep and Interview prep course (contains how to answer technical and behavioral questions and how to network, costs $197)
- Mergers & Acquisitions: IB interview questions and answers
- Breaking into Wall Street: IB Interview Guide
- Investopedia is also a great resource for anything finance related. Any terms or topics
- IB Description from Investopedia: Investopedia provides an in-depth description of Investment Banking
- 5 Best IB Interview Prep Courses: There are many paid courses you can take to prepare for IB interviews, and this article includes 5 of the best ones
Related Careers
- Portfolio management, Financial/economic analyst, Venture Capital, Corporate finance, Entrepreneurship, Private equity, Growth equity, Asset management
Informational Interviews
Philip Barber
Company Name: A "Bulge Bracket" Investment Bank
Title: Investment Banking Analyst
Years of Experience: 2
Biography
Philip Barber is an Investment Banking Analyst in the Mergers & Acquisition (Technology) group at a "Bulge Bracket" Investment Bank, which consists of world's largest multi-national investment banks. He graduated from Santa Clara University in 2019 with degrees in Finance and Spanish and was the co-founder of the Investment Banking Club at SCU.