Developing A Career In Investment Banking

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.