Top Career Opportunities In Investment Banking

Are you looking for an opportunity to build up your career in the finance industry? Are you familiar with the term “investment banking?”  After completing graduation, you can plan your career in investment banking. This article will give you a clear idea of investment banking, its meaning, types of investment banks, roles of investment banking, and so on. Several types of investment banking are also added in this article. Also, you will get in-depth information on career opportunities in investment banking from this article. Let’s discuss investment banking in detail.

What is Investment Banking? 

Investment Banking is a type of financial bank that provides several financial and business advisory services to its clients and their clients can be government, corporate sectors, and other private and public institutions. The main job of investment banking is to raise capital for its customers to grow their business globally. Investment banks serve the customers to reconstruct and restructure their business by taking a vast range of money from those financial institutions.

Thus, it is a great service for those clients who want to provide products and services at the perfect time to their customers and also gain customer satisfaction. Different types of investment banking services are provided to its existing clients to do better for the business and also augment the business in the future. The clients can be beneficial after getting the services from those investment banking institutions. 

What Are the Various Types of Investment Banking? 

There are various types of services in investment banking. These services are Underwriting Services, Mergers & Acquisition Services, Asset Management Services, Equity Research Services, and Sales and Advisory Services.

Career Opportunities in Investment Banking #1

Underwriting Services:

This service is one of the biggest investment banking services in the world of business services. In the form of equity and debt securities, this service collects capital from the investors for their clients to develop their businesses for the long term. There are three different stages of underwriting services to process the capital and make it easy for the clients to promote their business to their potential customers.

These stages include planning, demand, and tissue structure. In the first phase of this service, the investment bank collects and plans the entire issue of the clients and comprehends the logic between the demand of investors. Next, the second plan is to execute the present market condition to raise a huge amount of capital from the investors for their clients.

This second phase is there to analyze the current condition of the market, political situations of the market, target market, and problem-solving capability of the market. The last phase of underwriting services is issue structure. In this phase, the main motive of investment banks is to create a structure of the whole public issue and therefore it generates three main questions. The questions related to the issue structure are: does this issue really go to the national or international level, are the investors interested in this offering, and finally how does the entire sale happen?

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Mergers & Acquisition Services:

Mergers & Acquisition Service is another investment banking service in the finance industry. In the Mergers service, the investment banks approve the association of the business institution and look for the approval of the shareholders. On the other hand, in acquisition service, it is seen that one of the companies can acquire another company and thus the acquired company receives most of the stakes in the firm.

Mergers & Acquisition Services generate four kinds of transactions and are mergers, acquisitions, leverage buyouts, and tender offers. To reach out to existing customers, the business institutions seek help from mergers & acquisition services from the investment banking service institutions and therefore it has a great scope and creates opportunities for the business world. 

Career Opportunities in Investment Banking #3

Asset Management Services:

Another service is asset management service in the investment banking service. This service provides one of the most essential services of investment banks. Insurance companies, government departments, and other financial private departments take asset management services from the investment bank. Asset management service consists of various types of investments i.e., derivatives, fixed-income stocks, and others.

As a personalized asset manager, the investment banks create a portfolio for their clients which maintains a majority of the return for an accurate risk that those clients can bear the loss in any situation. Therefore, it can be said that asset management is an investment fund for investment banking services.

Career Opportunities in Investment Banking #4

Equity Research Services:

In this service, equity research professionals analyze the business data and produce results that can be termed business reports dependent on the clients’ investment opportunities. With the help of the equity research service, investors can get absolute knowledge of making decisions before buying a stock. The major role of equity research is to give insights into the business performance of a business and make the investors a lucid idea of the potential business risks before investing in the business.

Based on the previous financial data, the equity report examines the strengths and weaknesses of the business and puts them forward to the investors for the sake of the investor’s advantage to invest capital in any business. Thus, asset management firms and other insurance companies invest in the equity market to secure a good return for their existing and also potential clients. 

Career Opportunities in Investment Banking #5

Sale and Advisory Services:

Investment banks create a business relationship with the companies to make them able to trade publicly in the future. The service in sales department offers the following services i.e., researching, analyzing, reporting, publishing, and stick marketing. Other advisory services of investment banks are asset analysis, business valuation, strategic business planning, and capital flow, and overall it offers solutions to clients so that they can expand their business for the short-term and also for the long-term. In this case, feasibility analysis and feasible project reports help them to enlarge the business across the globe. 

Investment Banks and Their Types

Based on the size of the bank and the process of providing services, the investment bank can be divided into four sections. They are Bulge Bracket Investment Bank, Elite Investment Bank, Middle Market Investment Bank, and Regional Investment Bank. 

Bulge Bracket Investment Bank

Bulge Bracket Investment bank is the largest investment bank across the globe. Their services range from national to international level. As they are huge and provide international services, their employees are unlimited. They try to provide every type of investment banking service to the clients such as asset management services, mergers & acquisition services, equity research services, underwriting services, and sales and advisory services. As they can provide all of the services to their clients, they have demand in the market. 

Elite Investment Bank

Elite Investment Bank resemblance with Bulge Bracket Investment Bank in various aspects. They are not present in every country around the world but try to maintain their business in most of the countries and provide a few banking services such as mergers & acquisition services to their existing clients. Thus, they have limitations in providing investment banking services whether they may provide equity research services, asset management services, and others to their clients as per their needs and if they can offer the service.

Middle Market Investment Bank

Middle Market Investment Banks generally come under Bulge Bracket Investment Banks and Regional Investment Banks as per their size, employees, and others. They offer more opportunities to their clients than regional investment banks and fewer opportunities than Bulge Bracket Investment Bank. Usually, they offer services regionally but do not have the privilege to provide services nationally. Their services are mergers & acquisition services, asset management services, and restructuring services to their existing customers but they specialize in only a few services. 

Regional Investment Bank

Regional Investment Bank is the smallest investment bank compared to all other banks around the world. As they are small in size, they are capable of service in regional and local markets. They cannot provide investment banking services nationally and internationally. They have the smallest number of employees, and their clients are fewer than any other investment bank. As the deal is not large, they do not offer every service to their service because they do not have the kind of infrastructure the other banks have. In these banks, the investment bankers only provide mergers & acquisition services to their customers as they have the limited capacity to serve investment banking services.

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Profiles in Investment Banking 

Investment Banking is a lucrative career, and it ranges from junior to senior positions. An investment banker can be an analyst, associate, account manager, senior account manager, director, and managing director. The several positions in investment banking will be discussed in the following section. 

1. Investment Banking Analyst

After completing graduation anyone can go for an investment banking course and can be an investment banking analyst. It is a two-year program that creates a profitable career for the person. In the investment banking chain, analysts are the lowest and they do the majority of the work. Their work includes presentation, analysis, and administration. In the presentation process, they make presentations in PowerPoint which are called pitch books. To set up a meeting with existing and potential clients, these presentations are printed in color and are bound with professional covers. The next task of an analyst is to analyze their work. The analytical work done in Excel includes putting past data from public documents, credit analysis, financial statement modeling, valuation, etc. The last and final task of an investment banking analyst is to do administrative work. This task involves several works including scheduling, creating conference calls, meeting, building travel arrangements, and updating the working list of the team members. If the person is the sole analyst of the deal and he or she gives advice to their existing clients to sell the business, they may control the virtual data room and they have to organize it uniquely so that the other parties can access the information. It will be beneficial for the person to get to know the feelings of the clients about how they feel as the analyst try to win the business. 

2. Investment Banking Associate 

After three years of being an investment banking analyst, the person can be promoted to the next step, which is an investment banking associate. Otherwise, they can be recruited after completing their MBA program. The major role of the association is similar to the analyst and additionally, they create a bridge between junior and senior bankers. Also, they can work directly with clients for business purposes. Investment banking analysts and investment banking associates work together. The associate generally checks out the work of the analyst and assigns them new tasks. 

3. The Senior Bankers

Senior bankers hold a high position in investment banking. They have a vast variety of tasks ranging from investment banking to corporate executive management. Apart from their different sets of tasks, they often understand the industry through an in-depth analysis and in that way they anticipate the deal in the business sector. They generally help companies when they need capital for their business as well as at the time of mandatory strategic business discussions. By managing all the needs, managing directors reach out to the clients with their live pitches to gain trust from their clients and make a business relationship with their clients effectively. 

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What Are the Top Investment Banks?

In investment banking, the following banks dominate the investment banking business in the world. 

Goldman Sachs

This bank was established in New York in the year 1869. It provides services relating to finance, investment, executing, and advisory services to its clients to achieve business goals. According to Goldman Sachs’ Annual Equity Capital Markets Investor Survey, the equity capital market will double in 2023 from the years before. Now this company is a place of dream jobs for many.

Morgan Stanley

Morgan Stanley’s headquarter is in New York with other branches presented in London, Tokyo, and Hong Kong and it has a vigorous presence worldwide. It desks with three major operations such as wealth management, investment banking, and institutional securities. It helps individuals, private institutions, and the government raise the necessary capital to attain their business goals. In addition to all these works, they offer services to their clients like settlement, brokerage, custodian, clearing, etc. for the client’s business precision. 

Citibank

As a universal bank, its services consist of investment banking as well as commercial banking. This bank was established in the year 1812 and currently, it is presented in more than 160 countries all across the globe. The majority of the works of city banks include origination, market, security services, treasury, trading solutions, and corporate and investment banking. Thus, it provides several business and investment banking advisory services to clients to create a perfect business goal. 

J.P. Morgan

J.P. Morgan is one of the greatest investment banks in the world with its presence in 60+ countries. It also provides services such as investment banking, private banking, asset management, merchant banking, commercial banking, treasury, security, and many more to its existing clients for their betterment in business and to grow the business globally. 

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What Are the Skills of an Investment Banker?

An investment banker can have the following skills such as financial modeling skills, business valuation skills, relationship management skills, technological skills, and sales and business development skills. 

Financial Modelling skills: Financial models such as discounted cash flow model, forecasting model, leveraged buyout model, and budget model are needed for business purposes. 

Business Valuation skills: Business valuation methods are discounted cash flow analysis, comparable business analysis, and many more, and investment bankers utilize these kinds of business valuation methods to provide services to their clients. 

Technological skills: Technological skills such as excel, ppt, and pitch books are necessary for developing the client’s business. For the sake of growing business in the long run, these types of technical skills are needed for investment bankers. 

Relationship Management skills: To satisfy the customers, investment bankers maintain their relationship with the clients. Customer satisfaction is the main motive of any business providing services so that the clients can be happy and therefore they upgrade their business by using these services. 

Sales and business development skills: Investment bankers with their new business ideas and strategies provide value-added service to the clients so that they can increase their business and advise how to augment the business by developing the sales department. 

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FAQs on Career Opportunities in Investment Banking 

Q1. Why does anyone choose investment banking for their career in the finance industry?

Investment banking has become a vital part of the finance industry now. Investment banking creates an amazing opportunity to become an expert on complex financial models. Whether bankers are not great investors, they spend most of their time on valuation work, thus it is investment bankers can be advisors for business purposes. Thus, due to these various reasons, investment banking has a huge demand. 

Q2. What are the good skills of being an investment banker? 

Investment bankers should have these skills i.e., communication skills, leadership skills, motivational skills, etc. At the same time, an investment banker must always be professional. 

Q3. What are the necessary qualities of an investment banker? 

An investment banker should have a clear aptitude knowledge and be interested in the financial markets. Computer knowledge is mandatory in this regard. He or she should be efficient in MS Word, MS Excel, and MS PowerPoint.  Sheer excellence, discipline, and open-mindedness are necessary to become an investment banker.

Q4. What is the process of finding a job in investment banking? 

Investment banking is a competitive field with more applicants than fewer positions available each year. A person should build a strong resume and update it on LinkedIn to broaden his or her network to find a job in this field. The next step is that the person will have to master technical skills like accounting, financing models, excel, valuation, and more. The person should build soft skills to qualify for the interview process. In the interview process, the person can be asked three types of questions including technical, behavioral, and problem-solving. 

Q5. What are the difficulties faced by investment bankers?

The difficulties faced by investment bankers are the scarcity of capital resources, technological disturbance, difficulty in cross-selling, and increased regulations. After the pandemic, almost all companies are uncomfortable investing their money in the long run. Thus, investment bankers encounter difficulties as the businesses are reduced for decreasing the resources of capital in the market. The clients are supposed to take specific advisory advice from the investment bankers for example mergers & acquisition services while the investment bankers tend to impose other business advisory services on them. Hence decreased budget means decreased revenue and eventually, the investment bankers face difficulty in cross-selling. Thus, it can be said that investment bankers are not in their heyday anymore.  

Concluding thoughts on various career opportunities in investment banking 

In this article, the meaning of investment banking has been discussed through thorough research. Additionally, the career opportunities in investment banking are a major part of this article and you will be able to find a solution to know more about the opportunities in this field after going through this article. The four types of investment banking are evaluated and their services differ from one another. In today’s finance industry, investment banking is a productive career and working professionals in this field earn a lot by providing investment banking services to their existing and potential clients. As per the above discussion, any person can be an investment banking analyst after completing graduation, and after MBA or other finance-related higher studies, they can be promoted to the next level in this field such as investment banking associate, senior banker, or director. Therefore, exploring investment banking can give you a great opportunity to become a successful investment banker and develop your skills and knowledge in this field.