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Careers in Investment Banking

Investment Banking is the area of financial services that helps corporations, institutions, and governments to raise capital and provide financial advisory services. Investment bankers play a crucial role in facilitating mergers and acquisitions. They help in taking companies public and invest in growing ventures.

An investment banking career is suitable for highly ambitious, competitive, and detail-oriented individuals with exceptional quantitative and presentation skills. It is one of the most rewarding careers in terms of compensation and recognition. The working hours are intense and challenging. Investment banks focus on building long term relationships with their clients by delivering high quality services.

Some common job functions include:

  • Advising clients on strategic targets for mergers and acquisitions. Investment bankers employ financial models to assess the viability of potential deals and provide strategic advisory to their clients.
  • They help their clients to raise capital. The underwriting department of an investment bank assesses capital requirements of their clients and identify best means of raising capital for them. Investment bankers play a vital role in structuring initial public offerings.
  • Many investment banking firms also provide private equity services. Professionals working in this arm of investment banks help non-public entities in raising capital.
  • They provide capital to new and growing ventures. Irrespective of the success of the ventures, venture capitalists gain high return on investment by selling their stake in early development stages.
  • They provide investment advice to their clients to maximize their returns at low risk. Buying and selling of financial products like stocks, derivatives, bonds, etc.

Investment Banking Career Path

Analyst: Analysts are recent graduates from college mostly with a finance degree. They engage in collecting and analyzing data from several databases, preparing presentations and reports, and preparing pitches for clients. Investment banking analysts get an opportunity to work on large deals and it is one of the most attractive careers in terms of learning with decent compensation. However, it is a challenging job with very long working hours (80-100 hours per week).

Associate: After 3-4 years of experience, analysts are promoted to associate. Investment banking associates manages a team of analyst and acts as the point of contact between investors and clients. They play a crucial role in executing deals ad report to the vice president. Investment banking associates are highly educated and skilled individuals with extensive practical experience in the field.

Vice President: Having experience of working in numerous projects in their investment banking career, Vice presidents are experts responsible for deal origination and execution. They are responsible for business development of the firm. Building strong relationships with clients to obtain maximum business from them is a major part of their role. Vice Presidents are responsible for the profitability of the department as they bring business to the firm.

Managing Director: Having an experience of 15-20 years in the field, Managing Director is responsible for sourcing deals from the market. The role requires exceptional networking skills and contacts. They look for synergies among corporates and execute large deals. Apart from the fixed salary component, managing directors get commission for the deals that they execute.

Most of the investment bankers start as financial analysts. Finance graduates from top universities and MBA colleges are recruited for this role. Investment banks also give preference to CFA charterholders. Many investment banks recruit entry level employees from their interns. Therefore, securing an internship at top investment banks during college is a great way to begin your investment banking career.

Top Investment Banks in India

Click here to understand more about courses like CFA that can help you prepare for a career in investment banking. MBA in Finance and CFA are given preference for investment banking roles. Click here to decide which one is more suitable for you.