Investment Firms, Career Paths, and Successful Banking Jobs
Investment banks function to create capital for corporations, businesses, and individuals. They offer a wide selection of products and services, including private wealth and asset management, intermediation, and others.
Jobs and Salaries
There are attractive career opportunities in corporate finance and other areas. Financial institutions such as Morgan Stanley, Golden Sachs, and others hire associates, managers, analysts, syndicate compliance officers, and other specialists. Generally, they attend meetings with individual and business customers, write memos and reports, carry out transactions, and offer specialist advice. Bankers specialize in private equity, underwriting, wealth management, venture capital, and mergers and acquisitions. Recent graduates usually apply for analyst positions, and their responsibilities include administrative tasks, presentations, reports, and analysis. They analyze data such as credit reports, valuations, financial statements, and others. Analysts have different administrative tasks and are responsible for travel and business arrangements, answering calls, and developing schedules. MBA graduates often work as associates in multinational firms and large banks. Associates work with customers and review initial public offerings, valuation materials, and drafts. Associates also structure and carry out financial transactions, offer M&A advice, and develop strategies that help institutions, businesses, and individuals to capitalize on their assets.
Investment bankers also specialize in trading, project finance, and mergers and acquisitions. Depending on the area of expertise, they work in the field of equity and debt markets, fixed income and equity research, derivatives, and structured finance. Salaries vary based on experience, level, and responsibilities. The salary of junior analysts and assistants, for example, is in the range of $100,000 and $150,000. Top performers earn generous bonuses of about $90,000, but this depends on many factors, including the state of the economy. The base salary is around $60,000. Many financial institutions offer a starting salary of $70,000 to $75,000.
Investment Banking Degrees
Most firms and banks have education requirements and prefer candidates with MBA, Master's, and Bachelor degrees. Those who wish to maximize their chances may want to complete a degree in business administration, economics, finance, or accounting. Students who are interested in mutual fund management usually study economics. Finance and accounting are more specific. The best choice is economics because it gives students extensive knowledge about how the economy works.
Many firms offer internships to new graduates who are looking for opportunities to gain work experience. Typically candidates should have outstanding analytical, presentation and organization skills. Interns gain experience in different areas, including securities, industry sectors, leveraged finance, and equity and debt markets. Some firms prefer candidates with a second European language. Generally, interns assist analysts, associates, and managers. They learn about debt financings, mergers and acquisitions, stock offerings, and more.
Investment Banking Companies and Institutions
While there are hundreds of thousands of financial institutions, they can be grouped in three major categories: advisory firms, mid-market, and multinational banks. Advisory boutiques have several employees and are regionally based while multinational institutions have branches in the major financial centers and many areas around the world. Mid-market companies offer services and advice to mid-cap and small-cap businesses but don't have commercial or retail functions. Multinational institutions come in different varieties, including advisory houses, pure-play, and universal banks. Goldman Sachs, for example, is a pure-play firm. Among the top firms are Merrill Lynch, Credit Suisse, Morgan Stanley, and others. There are also advisory houses that specialize in DCM, ECM, and mergers and acquisitions and underwrite financing. They can be divided into equity capital markets syndicates, convertibles, corporate banks, and regional players. New graduates working in advisory houses typically consult clients, develop presentations, and have administrative tasks.