How to Start Your Investment Bank Career
Investment banking is the most lucrative and exclusive career in the finance industry. Successful investment bankers need to have strong research acumen, top-notch analytical skills and the desire to commit to the long work hours required. An investment bank career spans a gamut of different positions. Here is an analysis of some of the possible career opportunities.
Investment bankers working in corporate finance act as advisers to major corporations. These major companies will want to sell securities to raise cash to finance growth or to buy other companies. As a member of the corporate finance department you will help in underwriting equity and debt offerings to help a company meet their financing goals.
You may also be involved in consulting with companies to analyze their financial position. Many companies will divide their corporate finance department based on industry. Employees with prior work experience in these industries are highly recruited for positions in corporate finance.
Corporate finance will also work with private companies who are looking to issue an IPO. You will be responsible for determining the feasibility of the company to issue an IPO as well as to determine the valuation of the offering.
Mergers and Acquisitions
The mergers and acquisitions group is referred to as M&A. They will work with companies that are trying to buy other companies or with the company that is being purchased. The purchase of another company can cost upwards of billions of dollars. M&A employees are responsible for calculating the numbers to determine the feasibility of making a purchase and what price to pay for it. After analyzing the potential purchase, these employees will be responsible for putting together the prospectus for the purchase.
M&A is considered the most challenging position within investment banking. People who work in M&A put in the longest hours in a profession this is noted for it 80+ hour work week. The research of a potential merger or acquisition target requires extreme secrecy. Any leak of a potential acquisition can skyrocket the purchase cost beyond what the company is willing to pay.
Researchers do quantitative and economic research on stocks and bonds in all market industries. In addition they do research on the companies that offer these stocks and bonds. The results of their research are used to issue market forecasts, speculate on market trends and make recommendations on stocks and bonds to buy and sell.
Investment banking positions in research require frequent travel to corporate headquarters and branch locations. Researchers will analyze a company’s financial position, market trends, and major competitors. This may include talking to a large number of people to collect the necessary data for the research. The research department will issue forecasts and recommendations.
While the various groups within an investment bank support each other, the work and responsibilities in each group varies. If you want to pursue a career as an investment banker, pick the segment that fits your qualifications and experience.