Investment Banking is a specific segment of banking services which helps individuals and companies in raising capital. It also provides financial consulting services to them. Choosing a career in investment banking comes with good payoff and a bright future. For instance, if you are a fan of the novels written by Chetan Bhagat then let me tell you that he is an investment banker at Deutsche Bank along with being a successful novel writer of India.
In this blog we will take you through how a career in investment banking looks like! So, Let’s Get Started.
What is an Investment Bank?
The investment banking division (IBD) of an investment bank allows you to help the institutions, individuals, organizations and governments to raise capital and complete mergers and acquisitions. It also helps new companies to go public.
An investment banking career is really demanding with analysts and finance individuals. The competition for the positions in investment banking is extreme, compensation is incredibly high, and therefore the work is extremely high profile.
The Entry Point
There are two main entry points into investment banking: analyst and associate.
Analysts are recruited from undergraduate programs and are usually expected to work at the position for 2 – 3 years.
Associates are recruited from MBA or other graduate programs. Associates have related responsibilities as analysts but engage in more responsibility rapidly. Both roles require extensive financial modeling and presentation building skills.
Positions & Delegations in Investment Banking
Working in the investment banking sector can provide you an opportunity to work in different roles such as-
1) Private Equity
Private Equity is one of the most esteemed jobs in today’s world. It includes investment in asset classes consisting of debt and equity in companies which are not listed on the stock exchange. Some of the popular private equity companies include KKR and Blackstone.
2) Venture Capital
Venture Capital shares resemblance with private equity firms, but the only difference is that they offer capital to startups while private equity deals with established firms. Becoming a venture capitalist requires a special set of skills as their role involves picking companies which are at the budding stage but have huge potential going ahead.
Underwriting is one of the chief functions of investment banks which help in raising capital for organizations and governments through the issue of equity, and debt.
4) Equity Research
Equity research is one of the vital parts of an Investment Banking career. They come with buy and sell side research which facilitates the trade of securities. Their reports are generally meant for internal use, but they may sell it to hedge funds or managers of mutual funds so as to make additional revenue.
5) Proprietary Trading
Some organizations also employ proprietary trading. It’s a trading desk which provides a chance to the traders to trade in diverse securities such as equity, bonds, currencies or commodities with company’s own money as compared to the depositor’s money.
6) Mergers & Acquisitions
You can also work in the Mergers and Acquisition (M&A) division, which gives calculated assistance to organizations to merge or acquire another firm or organization. They give advice to buyers and sellers about business valuation, pricing and structure of a transaction, negotiation, and execution. They have a specialized skill to ensure that such deals really make sense and are feasible for the business in the long run.
7) Asset Management
Investment Bankers also play the role of Asset Management Company where they deal with huge portfolios for their clients together with insurance companies, pension funds, etc. They help their clients in achieving their goals using the right blend of a variety of instruments such as equity, bonds, real estate etc. in their portfolio.
Skills required as an Investment Banker
Entering into an Investment banking career is generally not feasible without a degree, preferably a CFA or an MBA from Top B-Schools.
Nonetheless, getting into it is on the basis of capability and you got to have various skills to be eligible for an investment banking career.
· Strong number crunching and analytical skill
· Good communication skill
· Leadership quality
· Excellent in teamwork
· Able to work under pressure and to handle stressful situations
Life as an Investment Banker
An Investment Banker has one of the most esteemed jobs in the world. You get the chance to live in the finest cities in the world with the likes of New York, London, Mumbai, and Singapore. In addition to that you also get a large amount of cheque in money terms at the end of every month.
The pay/compensation of an Investment Banker is one of the best in the finance-related jobs across the world. In India, the average salary of an Investment Banker can range between Rs.25 Lakhs to Rs.50 Lakhs per annum. Such a payment would only be after a few years of experience in the field.
If you are able to travel outside of India and are qualified enough to land a job on Wall Street in the USA, you can easily expect to make at least $125,000 as a base salary and up to $10 Million as a managing director. You can accomplish such an achievement by working for a few years and gaining experience in an Indian company, and then transfer there.
Career preparation for Investment Banking
Imagine, if there was a platform that can provide a complete guidance in how to prepare for building a career in investment banking with the help of step-by-step guidance from the experienced mentors working with Goldman Sachs, JP Morgan, Morgan Stanley and Deutsche Bank?
How wonderful would it be?
Well, the good news is, you don’t need to just imagine it, but it’s actually in existence. It is the Finance Cohort by Career Edge!
Find more details here – https://career-edge.in/financecohort/
So, what are you waiting for? Grab the opportunity today and enroll yourself in the Finance Cohort. For Daily Updates, Join our LinkedIn Community.