Investment Banker Profile – Duties, Responsibilities, And Prospect
Do you want to be an investment banker? If yes, then this article acts as a guide. Here, I will be stating how to become an investment banker, how to make progress in your career as an investment banker, various roles & responsibilities performed by an investment banker, skills & qualifications that are essential to carry out those tasks & duties, and the salary earned. Before we are learning more about an investment banker’s profile, let us know what the field entails. Investment banking is the segment of a financial institution or bank that assists institutions, governments, and corporations by offering mergers and acquisitions (M&A) advisory services as well as underwriting (raising capital). They operate as a bridge between corporations (that need capital to expand and operate their business organizations) and investors (who want to invest their own money).
Kinds of Investment Banking
Before building a perfect investment banker profile, you can consider these forms of investment banking as a career.
Investment banks that focus on industry coverage normally split their employees into several special groups and allot each group a particular market or maybe an industry segment. The managing director controls the industry coverage team, which has the responsibility of staying abreast of rivals, the latest news, and trends. For the purpose of handling various projects for distinct clients, these units typically form smaller teams. These groups’ main goals are to manage current clients and explore new clients in the defined market segment. They manage client presentation pitches as well as ideas, bring out industry reports, and carry out transactions.
The primary goal of this kind of investment banking is to arrange finance for running or upcoming projects for its clients. Corporate finance-focused investment bankers frequently explore innovative strategies to help their clients raise finance. They could, for instance, aid companies in acquiring capital through the underwriting of securities. They are also in charge of carrying out mergers and acquisitions, providing securities between companies, and overseeing initial public offerings (IPOs).
Functions of Investment Banking
The terms investment bank and a bank’s investment banking subdivision can occasionally be used interchangeably. Retail banking, M&A, asset management, commercial banking, trading and sales, equity research, and underwriting are just a few of the many services that full-service investment banks provide. Only underwriting, as well as M&A advisory services, are offered by an investment banking part of a bank.
Various Services Provided by Investment Banking
It is a method where banks help clients (government, institute, or corporation) to raise capital from the investment in the shape of equity and debt securities. Underwriting advisory services occur in three stages – planning, timing and demand, and tissue structure.
Planning – Here, the main goal is to learn more about the logic behind the investment and the demand of the investor.
Timing and demand – These factors are vital to achieving a successful and smooth capital raise. To get hold of the timing and demand related to an offering, it is crucial to count the below-mentioned factors.
- Present market condition
- Present investor hunger
- Experience of the investor
- Benchmark offerings as well as precedents
- Present news flow
Issue Structure – In the last stage, it is imperative to decide on the structure of an offering. You must take into account the following questions while deciding on the issue structure.
- Whether it is an international or a domestic issue?
- If the investors like this offering?
- How will the sale take place?
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2. Merger & Acquisition (M&A)
In addition, investment banking offers services for acquisitions and mergers. It involves the merger of assets and companies via different financial transactions. These include the acquisitions of asset purchase, handling acquisitions, mergers, acquisitions, and consolidations. When two companies merge, the board of directors approves the merger and requests shareholder approval. In the scenario of an acquisition, one company can acquire another company. Most stakes inside the acquired company are obtained by the acquiring firm.
3. Trading & Sales
Trading and sales teams serve as the clients’ agents within investment banking. Salespeople that have opportunities call institutional investors. During an “enter” financial or even in an “exit” financial position, the traders will carry out their orders and advise the clients.
4. Equity Research
Equity research experts conduct a thorough analysis and create reports on investment prospects for clients in investment banking. Equity banking’s goal is to provide clients with advice regarding whether they should purchase, sell, or retain their investments.
5. Asset Handling
Asset management in investment banking is the handling of investment funds. It entails making investments in derivatives, stocks, and other investments as well as fixed-income stocks. Separate accounts are used to manage a variety of asset management products.
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Learning More About Investment Banking
Investment banks assist in the selling of securities, underwriting new equity and debt securities for all sorts of corporations, and help ease acquisitions and mergers, reorganizations, also including broker trades for institutes and private investors. Investment banks advise issuers regarding offerings and also about stock placement as well.
The largest include Deutsche Bank, Goldman Sachs, JP Morgan Chase, Morgan Stanley, and, Bank of America Merrill Lynch. Numerous large investment banking systems are linked with or subsidiaries of larger banking organizations.
Investment banks, generally speaking, facilitate large, complex financial transactions. If the client of the investment banker is seeking a sale, merger, or acquisition, they may offer guidance on the worth of a company and the best way to structure a transaction. In addition to these activities, investment banks may also issue securities to raise money for its clientele and prepare the paperwork required by the U.S. Securities and Exchange Commission (SEC) for a company to just go public.
Investment bankers are recruited by investment banks to assist governments, corporations and other teams with the planning and management of significant projects. By identifying project risks beforehand, investment bankers help their clients save time and money.
Ideally, investment bankers are subject matter experts with a heartbeat on the present market for investments, so businesses and institutions seek investment banks for guidance on how to best plan their development because investment bankers can make adjustments in their suggestions to the current state of the economy.
Investment bankers offer different clients relevant and essential advice on their needs for capital raising and mergers and acquisitions. Such clients can be found anywhere in the world.
Clients of investment banks
Governments – For purchasing or selling crown corporations, raising capital, and trading securities, investment banks collaborate with governments.
Corporations – Bankers assist private as well as public companies with their business expansion, initial public offerings (IPOs), capital raising, acquisitions, and the sale of business units. They also conduct research on their behalf and offer general corporate finance guidance.
Institutes – To assist them in trading securities and offering research, banks collaborate with institutional investors that look after other people’s money. Additionally, they assist private equity firms in obtaining portfolio companies and exiting such positions by either selling to a tactical purchaser or through an IPO.
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Advanced Investment Banker Profile Definition
Master investment banker profiles are investment experts who mix their mastery in the financial services sector with successful convincing communication skills, and, analytical efficacy to assist clients of institutes regarding activities like raising capital and M&A. They offer their corporate financial services to clientele starting right from start-up companies to successful organizations and, sometimes also governments. Be it working for the investment banking subdivision of an organization or an investment bank, investment bankers contribute a lot in the financial development and growth of an organization, other corporate entity or a business. Under the umbrella, of “investment banker”, a senior-level role like the executive vice president and entry-level role like investment banker are included in the field of investment banking.
What is It Like to Work as an Expert Investment Banker Profile?
Because an accomplished investment banker profile can benefit from a high salary, plenty of networking possibilities, and the opportunity to play a prominent role in an organization’s success stories, this career is frequently sought after. Nevertheless, people who prefer a more comfortable work-life balance may find the daily role of an investment banker to be challenging, quick, and intense. Investment banking might not be the ideal career option for you if you’re hoping for a job with a regular 40-hour work week and flexible work schedules.
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Advanced Investment Banker Profile Job Description
Advanced investment banker profiles carry out the following tasks:
- Coordinate Acquisition and mergers, also containing construction of financial models for analysing and assisting the acquisition or merger
- Setting prices for stocks to empower investors for investing in the stocks and raising funds to achieve growth of the company
- Confirming strict adherence to financial regulatory bodies like SEBI (Securities and Exchange Board of India)
- Management of Initial Public Offers (IPO) and creation of assisting documentation
- Assisting clients in setting price for their financial instruments
- Providing consultation services to companies and advising them regarding which securities should they issue to the investors
- Collaborating with firms, other entities or companies for raising public or private funds through the issuance of securities, debt as well as equity offerings, or underwriting of municipal bonds
Note, the roles and responsibilities depend on the requirements of the clients.
Paramount Investment Banker Profile Skills
Certain features or skills are necessary for an intelligent investment banker profile to succeed in this extremely competitive field. Here the major skills that investment bankers really have to thrive in their careers are listed below.
Understanding economics, analytics, finance, and mathematics are only a part of what is involved in this. You must be aware of both your own contribution and how it interacts with that of your colleagues and other relevant factors. For complex problems to be dealt with and innovative solutions to be found, smart investment banker profiles must be inquisitive.
You must practice self-control, diligence, and patience while putting in long hours if you want to prosper as an adorable investment banker profile. Additionally, you should be able to operate well in a highly tensed work atmosphere. Setting and achieving goals will help you to build self-discipline. For instance, execute a challenging task. Take up a new sport and, then play your best in a team.
While smart investment banker profiles are required to go by the rules and regulations, they are also pushed to come up with new ideas and take a fresh approach to problems. They frequently have to use their creativity to procure capital for new projects. They should be capable of thinking imaginatively in light of various circumstances as well as the industry they serve in. To develop this skill, you can think about enrolling in college courses related to entrepreneurship.
The capacity to communicate, collaborate, and forge relationships with persons from different cultural origins is known as intercultural competence. Being able to work with and for international business organisations requires you to be a culturally skilled banker, and, therefore you should be open-minded enough to understand various societies and cultures. The skill to converse in several languages and have these expertise and understanding are highly valued in the field of investment banking. Think about participating in a study overseas course or picking up a second language while you’re in college.
At times when you have to deal with difficult clients in tense scenarios and ensure a positive outlook and build and assist client relationships, you must have dynamic social and relationship-forging skills. You should have active communication skills (speaking as well as excellent analytical skills) and the ability to satisfy or surpass expectations and, you need to be brilliant with forging relationships with your clients.
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How to Build an Impeccable Investment Banker Profile
In order to build an outstanding investment banker profile, you need to go through the following steps:
Receive Bachelor’s Degree Certificate in Finance or Similar Field
To be eligible for an incredible investment banker profile, you must possess at least a graduation certificate in finance. You can apply for admission to a college or university that is accredited and pursue a bachelor’s degree certificate in finance or a similar field by passing a variety of entrance examinations. For example, you can decide to pursue a bachelor’s degree certification in corporate finance, business administration, data analytics, or accounting. You must have outstanding mathematical skills and a solid grasp on economics and the way it is applied in corporate finance, no matter what area of study you choose to study.
Think of a Post Graduate Degree Certification or Equivalent Degree Like MBA
To further grow in your career, you can earn a post-graduate certification in your field of study or take up an MBA (Master’s in Business Administration). Numerous firms prefer candidates who possess a postgraduate degrees in the role of an associate or analyst. It is advised that you conduct research before selecting a college where you will pursue a post-graduate degree. Find a college that provides full-time job and internship opportunities within investment banks. You might still receive a post-graduate degree or an MBA from an unpopular program, but it would not be as convincing to future employers.
If you want to make further progress in your career, it is advisable that you enroll in certification in your field of the subject according to the industry requirements. Check job search portals, and blogging websites or receive advice from an expert, qualified, experienced investment banker profiles regarding what certification should you pursue. For example, you can contemplate registering for the Chartered Accountancy offered by the Institute of Chartered Accountants of India (ICAI).
Participate in Internship Programmes
During the breaks between semesters, you can complete internships while pursuing your degree certification (bachelor’s or masters). It will assist you in strengthening your skills and provide you the chance to gain first-hand knowledge of what it’s like to work like an investment banker. Once you start working for a firm, you might also receive on-the-job training. Before beginning your regular job, you must finish your training. Fundamentals of statement analysis, accounting, risk, financial modeling, financial analysis, and markets will be mostly covered during your on-the-job training. Additionally, the training will assist you in improving your presentation as well as communication abilities.
Grow in Your Career
To succeed in your field, you must always strive to further your career. If you have a bachelor’s degree and are working as an investment banker, you may decide to earn a master’s degree or further certifications. Many firms assist their staff in pursuing further education or completing on-the-job accreditations to build and heighten their skills. You will have opportunities to progress into managerial positions as you get more experience in the field of investment banking, where you will supervise analysts and associates.
Career Path of an Advanced Investment Banker Profile
However, job titles are more likely to use the terms “analyst” to denote a genuine entry-level role and “associate” to denote a role demanding considerable experience. If you have assumed an entry-level role of an investment banker, you may be called to as “junior bankers” in general. However, those with substantial experience in investment banking will be regarded as “senior bankers.” Vice president (VP), Managing Director (MD), or Director, and, Senior Vice President (SVP) are examples of positions in this category.
The average salary per annum of an investment banker in India is Rs. 400000. However, for entry-level roles, the yearly salary is Rs. 200000 and goes up till 2800000, which is earned by senior-level employees. If you are a graduate engineer, who just ventured into the field of investment banking, your salary will automatically start from Rs. 500000.
Frequently Asked Questions
Q1. Who is an investment banker?
A person who frequently works for a financial institute and is focused solely on raising capital for other entities, governments, or corporations is known as an investment banker.
Q2. What does an investment banker do?
As an investment banker, you will be providing services related to research, sales & trading, raising capital, mergers & acquisitions, restructuring & reorganization, underwriting & market making.
Q3. Should I pursue a career in investment banking?
This question is frequently asked at the start of interviews for careers in the field. If you are unclear of how to respond to this question, particularly if your primary motive is earning high salary or even a career at a famous institute, think about emphasising some of these qualities provided they pertain to you.
- Data-propelled Thinkers
As was already said, investment bankers require analytical abilities to help them in advising companies on critical financial decisions. Investment bankers are not required to be mathematicians by profession, but they do need to be able to execute calculations for building financial models and fixing pricing.
- Sales-Oriented Communicators
Interpersonal skills and effective communication are essential for investment bankers who engage in capital raising or concentrate on assisting start-up business organisations get funding. For the benefit of their clients, investment bankers must be exceptionally skilled writers plus public speakers. Investment bankers must also be adept at producing and delivering “pitch books” as part of their client services roles if they want to attract new clients and investors and aid themselves in gaining new businesses.
- Compliance and Ethics Masters
A professional investment banker will also make an effort to learn as much as possible about the markets that their clients operate in. They should pay special attention to the legal rules and regulations that govern the industries of their clients, and they should have a stake in guiding those clients to long-term ethical and profitable decisions.
Investment banking is a great career track for those who are serious about finance and thus are prepared to put in the effort, despite the fact that it has three drawbacks: it demands working overtime, has a tight work environment, and is a very competitive industry. You communicate with real decision-makers, earn a shitload of money, and get loads of really useful skills. Investment banking is ultimately a very difficult field to crack, but to get started all you really need are determination and ambition. Everything else can be learned with ease.