Developing A Career
In Investment Banking
Investment Banking 101
Top investment banking companies like Morgan Stanley and
Goldman Sachs are names recognized throughout the world. But
what sets them apart form the high street banks?
An investment bank acts as an
intermediary between providers of capital, such as venture
capital firms and private equity funds, and users of capital,
such as the public sector or the World Bank.
They deal exclusively with large organizations as opposed to
the general public and SME’s who carry out banking transactions
through a commercial or high street bank.
One of the main aspects of an investment banking firm
involves the underwriting of securities like stocks and bonds.
Basically this helps companies to raise the money they need to
buy new premises or even take over a competitor’s business. The
bank handles the entire process from the government filings
right through to the sale of the stocks or bonds.
Another key role of an investment banker is to act as an
advisor in the field of corporate re-structuring and mergers
and acquisitions. Whether it’s for the purchase or sale of a
business, the investment banker has a duty to negotiate the
best terms for his client.
Investment bankers trade on Wall Street and deal in the
derivatives, futures and currency markets. It’s a fast paced
world and not one for the faint-hearted. Forging a career in
investment banking requires nerves of steel but can be very
rewarding.
Investment Banking Careers
Due to the current global financial crisis, we’ve heard much
about the exorbitant bonuses paid to bankers, and whilst they
are sure to decrease in future years, salaries are good and
promotional prospects excellent. The downside is that the hours
are long!
To break into the world of investment banking jobs you’ll
face strong competition. To be successful, you need to have
excellent analytical and interpersonal qualities and/or
mathematical and accounting skills. Increasingly, a
qualification such as an MBA is becoming very useful. It’s also
vitally important that you are a team player.
If you’re a student, consider embarking on a finance related
summer internship so that you have some work experience to show
a potential employer. Look out for the on campus job fairs
where you can speak to the experts. Research the different
companies that will be attending. Many look for promising
candidates at universities and you could just be giving
yourself a leg up by demonstrating a in-depth knowledge of
their business.
It’s not easy to get started in an investment banking career
but if you have the right qualities and the necessary drive to
land a position, you’ll most likely start off working as an
analyst. Successful analysts work long hours, are familiar with
spreadsheets, and have excellent analytical skills. A good
analyst can be promoted to associate doing similar work, but
more of it.
Entry-level investment banking employees will also be
expected to write reports, do research and handle trades. Once
you’ve gained some experience, you get the opportunity to work
with clients.
Although we’re currently going through an economic downturn,
there are still opportunities out there. Companies that are
re-structuring turn to investment bankers for assistance and
with many businesses going bankrupt, skilled mergers and
acquisitions advisors are in demand.
The recession will end and when it does more opportunities
will present themselves. Now could be a good time to take the
necessary steps to forging a rewarding career in investment
banking.
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