Investment Banking Careers

What is an Investment Banker?

Investment banks help clients raise capital by issuing debt or selling equity in other companies. The Investment Banker works with governments, corporations, and other institutions to raise capital.

Investment Bankers are deal-makers who work as high-level consultants and analysts for large companies. In addition to mergers and acquisitions, they work with initial public offerings, stock purchases, and many other capital raising strategies.

 

What is an Investment Banker Responsible For?

Investment Bankers help companies raise money by selling and issuing securities. They help public and private investors by providing strategic oversight for mergers, acquisitions, and other financial transactions.

Investment Bankers help companies determine the best strategies to raise debt and equity capital. They prepare documents for accurate value proposition for funding, protect both the company and investors from misunderstandings in strategies and ensure that all transactions meet government regulations. They utilize their network of investors to find quality deals for their clients and determine maximum funding for the deals they broker.

Investment Bankers can expect to work at any of the following tasks:

· Advising clients how to create investment capital
· Reviewing targets and strategies
· Generating income from shares and loans
· Negotiating and structuring deals
· Running transactions
· Analyzing numerical information
· Creating financial models to predict financial outcomes
· Recommending tactics for investment
· Preparing legal documents and prospectuses
· Working with accountants, financial experts, lawyers, and regulatory bodies
· Buying and selling securities and commodities
· Analyzing and predicting movement of stocks

To be successful as an Investment Banker, prospects will need to develop the following skills:

· Leadership Skills. Investment Bankers assume complete ownership of business opportunities and often receive total ownership of an entire region. They work on multiple projects at once, leading many business assignments on their own. They build large teams, seek assistance from multiple internal divisions, and build relationships with vendors and partners.

· Analytical Skills. Investment Bankers present detailed breakdowns of potential business investments to highly qualified clients. They must possess the ability to analyze industry standards and local opportunities and suss out potentially lucrative deals.

· Intellectual Abilities. Investment Bankers must be knowledgeable in many industries and able to recognize investment potential in multiple opportunities. They have to calculate cost, return, time, and drawbacks for every opportunity and present this information to potential investors. They must be prepared to answer investor questions and follow up with additional information as required.

 

Where Do Investment Bankers Work?

Investment Banker jobs can be found in large global investment banks and within investment banking departments in commercial banks. They also work at smaller regional banks and for alternative investing entities such as venture capital firms and private equity organizations.

What Other Career Options are Available to Investment Bankers?

Careers available to Investment Bankers include:

Capital Markets

Capital Markets Specialists help companies originate new issues of debt or equity. They analyze market conditions, track interest spreads, and advise on the right time to issue and the form of issuance. They interact with individual equity and bond sales professionals to analyze institutional and retail accounts around the world.

Mergers and Acquisitions

Mergers and Acquisitions Specialists provide advice to companies and organizations that want to merge with competitors or buy out smaller companies. They use financial modeling to scale the potential mergers, predicting outcomes and drawbacks. This position typically requires communication with high-profile executives and clients, and the Mergers and Acquisitions Specialist needs to convince all parties that the deals are sound.

Corporate Finance

Also known as Investment Banking positions, specialists in corporate finance work to assist companies in raising capital for new projects and ongoing operations. They analyze funding amount and structure and help their clients with debt, equity, convertibles, asset-backs, preferred, or derivative securities. They usually work with teams of finance professionals, specializing in managing and investing large money funds and buying and selling financial products.

Private Equity

These are usually the most prestigious jobs available in all of finance. Investment banks often have private equity arms, but private equity jobs abound in specialist firms. Private Equity Managers review investment funds and portfolios of private companies to determine their value and investment potential. They provide strategic development and acquisition plans and are accountable to investors.

Venture Capital

Venture capitalist organizations specialize in providing capital to start-up companies. These investments can be very risky, but if successful, the original investors stand to gain a big payoff. Venture Capitalists must have strong networking skills as they spend much of their time meeting with entrepreneurs and other investors. They research and analyze companies and people and must make sound decisions on the likelihood of a company’s success and then present that information to the investors.

Underwriter

Loan Underwriters calculate the risk of making a loan, help to determine the guidelines of the loan, and approve funding. They analyze computer software to determine credit worthiness of individuals and companies seeking loans. They identify the risk from potential borrowers and establish the interest rates for loans. Underwriters typically work directly with clients, either in-house or with outside contacts, and they spend much time working with colleagues, such as traders and security salespeople, looking for the best options.

 

What Degree Do You Need to Become an Investment Banker? What Do They Study?

Investment Bankers typically start out with a Bachelor of Science in Business Administration, Finance, or Accounting. Other majors may be acceptable if they involve studies in finance, business, or management. An undergraduate student should expect to become competent in financial planning, portfolio management, commercial lending, financial statement analysis, business math, securities management, and legal compliance.

Because of stiff competition in the field of Investment Banking, a master’s degree in business administration, finance, or economics provides candidates with advanced analytical skills, giving them an edge in the field.

 

How Much Money Does an Investment Banker Earn?

People with Investment Banker jobs can earn an attractive salary plus a bonus. Entry-level positions pay around $65,000 to $95,000 per year plus bonus. Analysts with five-plus years’ experience can earn about $250,000 per year.

Salaries can vary wildly in Investment Banking. Portfolio Managers can earn approximately $135,000 per year, Directors average $160,000 per year, and Investment Executives may earn in excess of $325,000 per year.

As with most positions in the field of finance, actual annual salary varies, depending on location, experience, and size of the organization.