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Tag: Investment Banker

Essential Financial Market Functions Every Investment Banker Should Know

Posted on by Imarticus Learning

The world of investment banking operations is dynamic, fast-paced & crucial to the global financial system. As an Investment Banker, understanding…core financial market functions is not just beneficial—it’s essential.

From grasping the financial market structure to mastering risk management in investment banking, these functions define the efficiency of capital markets. This guide… explores key financial market functions that every aspiring Investment Banker should know.

Understanding the Financial Market Structure

The financial market structure is the-backbone of global finance, dictating how securities are traded and investments are managed. It consists of various interconnected components:

Component Description
Primary Market Where companies issue new securities (IPOs, bonds)
Secondary Market Where investors buy and sell existing securities (Stock exchanges)
Money Market Deals with short-term instruments like Treasury bills
Capital Market Focuses on long-term investments like stocks and bonds
Foreign Exchange Market Facilitates currency trading and hedging
Derivatives Market Involves contracts like options and futures

An Investment Banker must navigate this financial market structure seamlessly to facilitate transactions, advise clients, and structure complex deals.

Related Read: Functions of Investment Banking

Market Participants and Regulations: Who’s Who in Finance?

To operate successfully in investment banking operations…understanding market participants & regulations is crucial. These players ensure the smooth functioning of financial markets.

Key Market Participants:

Participant Role in Financial Markets
Retail Investors Individual investors buying stocks, bonds, and funds
Institutional Investors Large firms like pension funds and hedge funds investing in bulk
Corporations Issue stocks/bonds to raise capital
Government Bodies Regulate and participate in markets (e.g., RBI, SEBI)
Banks & Investment Firms Facilitate trading, capital raising, and advisory services

Regulations in Financial Markets

Financial markets operate under strict regulatory frameworks to maintain transparency &prevent malpractices. Some key regulations include:

  • Basel Norms: International banking regulations ensuring capital adequacy.
  • SEBI Guidelines (India): Protect investor interests and regulate stock markets.
  • Dodd-Frank Act (USA): Enhances financial stability and reduces systemic risks.

Related Read: Investment Banking Career and Growth Tips

Equity and Bond Markets: Driving Capital Flow

The equity and bond markets play a significant role in corporate fundraising and investment banking.

Equity Markets

The equity market allows companies to issue shares to raise funds. Investors buy stocks, gaining ownership in businesses. An Investment Banker assists in:

  • Initial Public Offerings (IPOs)
  • Stock Buybacks
  • Equity Research & Valuation

Bond Markets

Unlike stocks, bonds represent debt securities. Companies or governments issue bonds to borrow capital. An Investment Banker helps with:

  • Bond Issuance & Structuring
  • Yield Analysis & Credit Ratings
  • Debt Restructuring & Advisory
Market Type Characteristics Role of Investment Banker
Equity Market Companies sell ownership (stocks) IPO management, underwriting
Bond Market Companies/governments borrow funds (bonds) Debt issuance, rating advisory

Related Course: Certified Investment Banking Operations Program

Derivative Trading Strategies: Managing Market Risks

An Investment Banker must be proficient in derivative trading strategies. Derivatives help hedge risks and speculate on market movements.

Common Derivative Instruments:

Derivative Description Purpose
Futures Agreement to buy/sell at a future date Price hedging
Options Right (but not obligation) to buy/sell Risk control
Swaps Exchange of cash flows Interest rate hedging

Investment Banking Operations involve structuring these derivatives for corporate clients, investors, and hedge funds.

Fixed Income Securities: Stability in Volatile Markets

Fixed income securities are low-risk investments that generate steady returns. These include:

  • Government Bonds
  • Corporate Bonds
  • Treasury Bills

An Investment Banker must assess bond yields, credit risks, and interest rate fluctuations while advising clients.

Security Type Risk Level Return Potential
Government Bonds Low Moderate
Corporate Bonds Moderate Higher than government bonds
High-Yield Bonds High High returns but risky

Explore More: Land Your Investment Banking Career

Risk Management in Investment Banking: A Critical Skill

Effective risk management in investment banking ensures financial stability. Risks include:

Key Risk Categories:

Risk Type Impact Mitigation Strategy
Market Risk Price fluctuations affect investments Hedging with derivatives
Credit Risk Borrowers default on payments Credit rating analysis
Liquidity Risk Difficulty in selling assets quickly Portfolio diversification
Operational Risk System failures, fraud, mismanagement Compliance checks

Investment Banking Operations professionals use sophisticated models to measure and mitigate these risks.

Watch Video: Risk Management in Banking

FAQs

  1. What does an Investment Banker do?

They help businesses raise capital, manage risks, & navigate the financial market structure.

  1. Why is financial market structure important?

It helps Investment Bankers understand markets like equities, bonds, &derivatives for better decision-making.

  1. Who are the key market participants and regulations?

Investors, corporations, &regulators ensure fair trading and transparency in financial markets.

  1. How do equity and bond markets impact investment banking?

They help companies raise funds & Investment Bankers facilitate transactions and pricing.

  1. What are derivative trading strategies?

These involve using options & futures to manage risks in investment banking operations.

  1. Why are fixed income securities important?

They offer stable returns & help diversify investment portfolios.

  1. How is risk managed in investment banking?

Risk management in investment banking includes hedging, compliance & diversification.

  1. How can I start a career in investment banking operations?

Gain expertise in financial market structure, trading strategies & risk management through relevant courses.

  1. What skills are essential for a career in investment banking operations?
    Strong analytical skills, knowledge of financial markets, risk management expertise, and proficiency in financial modeling are key.
  2. How can I improve my understanding of financial market functions?
    Enroll in specialized courses like the Certified Investment Banking Operations Program and stay updated with financial news and market trends.

Conclusion: Key Takeaways for Investment Bankers

An Investment Banker must master the financial market structure, identify key market participants &regulations, and understand equity and bond markets to drive transactions effectively. Additionally, expertise in derivative trading strategies, fixed income securities, &risk management in investment banking is critical for success.

Key Takeaways:

Master the financial market structure to understand how securities move.
Learn about market participants and regulations for compliance and transparency.
Get hands-on knowledge of equity and bond markets to facilitate capital raising.
Use derivative trading strategies to hedge risks and enhance portfolio returns.
Invest in fixed income securities for-stability and predictable returns.
Develop risk management in investment banking strategies to prevent losses.

To build a successful career in investment banking operations, check out the Certified Investment Banking Operations Program by Imarticus Learning.

Top Questions to Ask an Investment Banker – Insights

Posted on by Imarticus Learning

Did you know that in the financial landscape, an investment banker plays an important role? He not only heps his clients raise capital but also navigates mergers and acquisitions while providing an apt finance advice. His roles and responsibilities are not stagnant like other professions as they change with the growing demand of financial services in the world every now and then!

If you are looking to amplify your career in this spectacular industry, you must begin with asking the right questions to gain valuable insights. After all, curiosity is the first point of attaining knowledge. 

Research says that, the demand for investment banking operations professionals remain strong globally. Given the circumstances of dynamic financial landscape and increasing complexities of this field, the world would always need these professionals to make better financial decisions.

Additionally, if you are looking to become a successful investment banker, you need to know what does an investment banker do and how he tackles challenges with valuable insights, the right skills and expertise. Hence, here comes your list of major questions to be asked of investment bankers: an investment banking path to success.

What is Investment Banker?

An investment banker is a financial expert working in investment banks to assist firms, government organisations, and other institutions raise funds through financial products. He guides clients through mergers and acquisitions, corporate restructuring, and more. Investment bankers are important deal-makers who guide their clients and best help them realise their financial goals.

More than a simple finance system, investment banking has been described to be a place where the work environment is highly dynamic and very much requires great analytical skills in knowing the market, negotiation skills, and financial transactions.

How to become an investment banker?

Do you want to know how to become an investment banker? First of all, it is necessary to understand the path which leads to this career. Here’s a brief guide:

  1. Education qualifications: Investment bankers on average have very high education qualifications because they hold finance, economics, or business degrees. Many even hold a higher degree, such as an MBA, or other courses, like Imarticus Learning Certified Investment Banking Operations Professional.
  2. Internships and work experience: On-the-job experience will be of very high value. You can intern at some investment banks. The more practical experience, the better your position is in that competitive world of the investment banks.
  3. Developing Core Skills: An investment banker should be well equipped with skills to possess proper analytical skills with an eye on detail and tight knowledge of a financial market. Professionals also tend towards the improvement in communication and negotiating skills that generally prove to hold much importance here.
  4. Certifications: Though a degree is a must, a certification like CIBOP puts one on a notch above others. It simply means that one can operate the necessary skills needed for investment banking and therefore put someone in the finance industry at an easier ability to tackle the tougher jobs in finance.
  5. Networking: This is connection with other specialists in the sector of finance such as attending event organised by one within the industry to keep up the trend in market.

Careers in Investment Banking: What’s in Card for You?

Careers in investment banking are generally considered as the one of the highest paying jobs. However, when it comes to salary generation or providing opportunities with career growth, this high-end jobs score much higher on this basis. In general, however, jobs in this regard are always pressure-prone. Some potential  careers in investment banking include:

  • Mergers & Acquisitions (M&A): You will advise clients on business matters related to the purchase or consolidation of other businesses, financial analysis, risk assessment, and negotiating the deals.
  • Corporate Finance: Raising capital, structuring financial transactions, and advisory  related matters come under corporate finance. 
  • Trading: Investment bankers buy and sell securities on behalf of their clients. In trading, one has to be aware of the market patterns and is also expected to take swift decisions.
  • Risk Management: The investment banker, through risk management, identifies risks and mitigates them by formulating strategies that enable people to avert the financial losses because of turbulent markets.
  • Research Analyst: The role of a research analyst is to do with analysis and provide commentaries concerning companies, sectors, or even the market in general, and advice on investment choices to investment decision-makers.

Investment Banking Courses Fees and Options

If you wish to pursue your career in investment banking, Imarticus Learning’s Certified Investment Banking Operations Professional (CIBOP) course is perfect. It has a 100% placement guarantee for finance graduates with 0-3 years of experience.

CIBOP training covers the following key areas: securities operations, wealth and asset management, financial markets, risk management, and AML procedures. Flexibility is also ensured with learning options available during the weekdays and weekends in the classroom or live online training formats.

The fee for investment banking courses differs depending on the providers and the period for which classes are conducted. CIBOP offered by Imarticus Learning is value for money since it provides excellent depth in the training provided with career support. Candidates have earned it through placement at an 85% rate with the highest up to 9 LPA salary.

Top Questions to Ask an Investment Banker

If you want to gain valuable insights from an investment banker, here are some of the questions you can ask:

  1. What do you face in the given role? You will get lots of helpful information if you get through that because you may understand various different things an investment banker has faced; their knowledge is really handy for the proper understanding of this job. It encompasses different things ranging from deadlines and pressure to the uncertainties of the markets.
  2. What trends are you most up to date on and how? The investment bankers know all about global financial markets and trends. Knowing how they gather information will make you understand that learning is an ongoing process in this kind of profession.
  3. What are some qualities that you have identified about the industry and profession? Within investment banking, skill often attracts great success; however, when it depends so heavily on skills-analytical thinking, good negotiation, getting the job done under pressure-these will definitely help one identify what are the most important of these skills upon which to really focus in advancing one’s own career.
  4. Most fulfilling deal or transaction? In investment banking some deals are well into the billions. Asking that which is most fulfilling, quite honestly is more of an honest testament to the level of work such is and feels filling to see how a client might have his goals accomplished.
  5. How would you balance work and life? Investment banking is supposedly a very demanding job. Long hours in work are known to define investment banking. Knowing how the investment banker strikes a work-life balance will tell you whether or not you should get into that industry.
  6. What do you like most in the job? No matter how troublesome the profession could be, its benefits are huge. That would help to identify why investment bankers are motivated in their work as well as being passionate about doing it.
  7. Can you also recommend some resources for future investment bankers? A good investment banker should be able to give you some excellent advice and recommendations on books, courses, and industry reports that can further help you in your career.

FAQs

  • What qualifications are needed to become an investment banker? 

Some main qualifications for selection to this position would be: degree in finance, economics, or any kind of degree that is regarded as business-based. For higher-level opportunities most investment bankers pursue some form of certificate, or MBA

  • How many years does it take to become certified? 

It depends, but around three years considering studying, practicing as an intern to gain real world experience then completing the several months or few years to actually obtaining these certifications.

  • Do people get a guaranteed job after investing in an investment banking course?

For example, CIBOP offers 100% job assurance to qualified candidates. They have a structured career path with hiring partners.

  • What is the investment banker’s salary? 

Investment bank salary varies across experience, geographic location, and job function. For an entry-level position, it ranges roughly from INR 6 LPA to 9 LPA, and sometimes can be more significant for the positions with the maximum experience.

  • What are the best courses for aspiring investment bankers?

The Certified Investment Banking Operations Professional (CIBOP) by Imarticus Learning is one of the most effective courses which can engage any inquisitive mind. It covers all the necessary topics, with opportunities for placement on the job. 

  • How do investment bankers stay abreast with current trends in finance? 

The latest trends of finance are followed by investment bankers by financial news, reports, industry webinars, and professional development.

  • Can I switch to investment banking from a different finance career?

Of course, it is possible, and what is needed is the right qualification and certification, such as the CIBOP course from Imarticus Learning.

Conclusion

An investment banking career can be challenging at some point but there are many opportunities in this direction. These opportunities with consistent hardwork can give great salary outcomes as well. You just need the right skills and expertise from a good institution to begin with. 

The excellent course offered by Imarticus Learning is Certified Investment Banking Operations Professional. It should be taken up by any serious learner interested in carving a niche for himself in the investment banking domain. 

With 100% job assurance, a strong connection in the industry, and a curriculum that transforms the mind, this course has everything you would want to achieve in finance. Start your journey today and take that first step to becoming a certified investment banking professional with Imarticus Learning.

Who Earns More CA or Investment Banker?

Posted on by Imarticus Learning

A Chartered Accountant (CA) is responsible for auditing accounts, giving advice, financial reporting, taxation, etc., whereas an Investment Banker is responsible for raising capital for their clients.

An Investment banker assists their clients in debts, equity selling, Mergers & Acquisitions (M&As). They both are professions in the finance field but differ a lot. This article lets us see who earns more and which job type (CA vs Investment banker) has a good working environment.

CA vs Investment Banker Salary Comparisons

The average salary of a CA in the United States is 90,400 USD per year. The salaries range from 48,800 USD to 136,000 USD. The average salary of an Investment banker in the US is 96,000 USD per year, with the highest salary going up to 140,000 USD per year.

According to LinkedIn, the average base salary of a CA in India is 6 lakhs per annum, with the total average compensation going up to 6.25 lakhs per annum, whereas the average salary of an Investment banker in India has an average base salary of 11.9 lakhs per annum. The total average compensation of an Investment banker in India can go up to 12.2 lakhs per year.

As one can see from the aforementioned stats on CA vs investment banker salary, an investment banker earns a little more when compared to CA’s. However, personal performances also matter, and it is likely that you may encounter a hard-working CA earning a lot. There is a lot to earn in life besides money, like having a social life. Let us compare the working cultures of both these professionals.

Work Environment of CA vs Investment Banker

We have to compare the equivalent job types in both fields, like analyst vs accountant, Multinational Corporation (MNC) vs domestic, etc. A CA has to study a lot and has to pass exams before stepping into the field. He is later paid well if he qualifies for the recruiting parameters.

An Investment banker could be anybody, an individual with an MBA degree can be a good Investment banker. However, there are certification programs and online Investment banking courses after 12th available, which can boost the skills of an Investment banker.

A CA has to audit the bank statements, and it is a tedious job, whereas an Investment banker is concerned with raising capital and assisting their clients, and they can deal with their clients with a phone call, too. A CA can have crazy work hours, but one can wrap up the work remotely if he/she is an Investment banker.

However, success in every field depends on the personal performance of any individual. If you can adapt to changes quickly and keep gaining experience, you will grow in any field.

CA vs Investment Banker – Which field is good to choose?

Both fields have their own unique pros and cons. One should instead focus on his/her own skills and qualifications to choose between a CA vs Investment banker role. If you are good at numbers and analytics and are ready to work and study hard, you can start your CA course.

If any individiual has completed his/her bachelor’s degree, is interested in deal structuring and management, has strong networking skills, he/she can opt for an Investment banking course. One must try to find a job role according to his/her skills to grow faster in that particular field. One must also try to analyze the working culture and environment of any job before doing it.

Conclusion

In the context of earnings, there is not much of a difference between CA vs Investment banker but depending on the complexity of the job and the pay according to that, an Investment banking role may be preferred. This article was all about the comparison of a CA and an Investment banker on various parameters.

FAQ’s

  1. What is the average salary for a CA in India?

The average salary for a CA in India varies greatly by experience, location, and type of company. However, they typically fall between INR 8 and 13 LPA (AmbitionBox).

  1. How much is the average salary for an investment banker in India?

Investment bankers are generally well paid as compared to CAs. Their average annual salary falls between INR 8 and 25 LPA and above (WallStreeSchoolIndia).

  1. What decides the salary of a CA or investment banker?

Experience, qualification, company size, industry, and location of both CAs and investment bankers decide their salary.

  1. Are investment bankers always paid more than CAs?

Although investment bankers earn high salaries as compared to a CA, it may not always be so. Here again, it largely depends upon individual performance, the size of the company, and the type of role of an investment banker.

  1. What are the chances of career development for CAs and investment bankers?

Both CA and investment banking offer scope for career advancement, though the paths might be different. While CAs can specialize in fields such as auditing, taxation, or finance, investment bankers can advance to become managing director or partner.

  1. Which profession has a better work-life balance?

Both careers are demanding, though investment banking appears to have longer hours than the rest, mostly during peak seasons. Balancing work and life can be more flexible for CAs, especially when compared with most non-audit roles, although tax season peak times mean a lot of overtime hours.

  1. Do Investment Bankers earn more over the long run?

Investment bankers do tend to earn much better in the long run because of performance-based bonuses, equity stakes, and a more humongous salary scale at senior levels such as Managing Director or Partner in investment firms.

  1. What are the reasons that bring in higher income for a CA?

For a CA, income can be multiplied by a few factors –  specialization in some field, say taxation, auditing, or forensic accounting, experience acquired through the years,  working in high-demand sectors, like consultancy or corporate finance and extra certification, like CFA or CPA.

  1. Can a CA transition to Investment Banking, and would it pay better?

Yes, some CAs do make this transition to Investment Banking, especially in mergers and acquisitions or corporate finance. Sometimes, it can improve your earning potential, especially after gaining relevant experience or further qualifications like an MBA or a CFA.

How Investment Bankers Can Find Success with the “Eight-Call Rule”?

Posted on by Imarticus Learning

Before jumping over to the “eight call rule”, let’s find out about the roles and responsibilities of an investment banker and how to be successful in this industry.

Role of an Investment Banker

Investment bankers are essentially financial advisors who guide their clients on profitable investment avenues and help them achieve their desired financial goal. The role of an investment banker is multi-faceted and involved a lot of things. The role also varies depending upon the type of organisation and the nature of the investment bank.
An investment bank can be broadly categorised in two categories; the buy-side firm and the sell-side firm.

At the core of sell-side investment banks lies the role of raising capital for clients from the market by issuing either equity or debt securities. Investment bankers help a great deal to companies who are looking to launch their Initial Public Offer (IPO) and raise capital from the market by issuing shares of the firm.

The buy-side investment banking activities include managing pension funds, mutual funds, hedge fund, institutional investors, etc. The primary goal is to maximise the wealth of the client by finding profitable investment opportunities after assessing the risk appetite. The buy-side investment bankers are in contact with sell-side investment bankers to facilitate investment. This helps to channel the funds in the market.

How to be successful in the investment banking industry?

The investment banking industry is known for its magnificent lifestyle and fat cheques. People on the outside are often unaware of the efforts and dedication it takes to be a successful investment banker.

Most of the young and aspiring college graduates are lured in by the outside glamour, knowing very little of the work that goes into making it big in this industry.

The title of an investment banker sets you apart from the crowd in the sense that you have access to high-profile individuals and confidential valuable information. Being successful in the Investment banking industry takes more than just good financial acumen and technical skills. You have to hone your soft skills and network with high-profile individuals and make your mark.

You have to manage multiple aspects of the job that includes conducting research meeting new prospects, closing deals, etc.

Experts over the year have experimented with a rule that has resulted in successful breakthroughs in the Investment banking segment. It is popularly known as the “Eight-Call Rule”. Let’s dig deeper to find out what it entails.

The “Eight-Call Rule”

A big part of an investment banker’s role entails reaching new clients to expand the business. Arranging a meet with new clients involves a lot of cold calling and emailing before finally getting the consent. Cold calling new contacts are not very effective and often lead to disappointment. So what can you do to reach new prospects? Well, the short answer to this question is perseverance and patience and the long answer is the “Eight-Call Rule”.

Investment banking professionals at an Atlanta based Investment bank have found an effective strategy that has shown profitable outcomes. It has helped them reach new prospects strategically. The story behind the eight-call rule is very interesting. Investment banks have always logged all contacts with a prospective client; the twist here is that they have started leveraging data to obtain valuable insights.

This data scrutiny helped the investment banks to find the sweet spot for reaching new prospects; they got the magical number, which was ‘8’! As per historical records, it takes eight cold calls to reach a prospective client. Another important insight revealed from using data was the average number of calls for reaching an investor. Three was the lucky number here. However, it was not necessarily limited to phone calls. Other touchpoints like mail and messaging were also included in this.

What is Role of Investment Banker in Underwriting Process?

Posted on by Imarticus Learning

When it comes to choosing lucrative career options, the investment banking field has got its own charm. The big fat paycheck certainly adds a lot of weight when it comes to increasing the competition in the field. The big cheques bring big responsibilities to the table, the role of an investment banker is very diverse and requires a combination of hard and soft skills to prevail in the face of cut-throat competition.

One of the key roles of investment bankers and investment banks is highlighted in the context of the underwriting process. Before jumping over to the crucial role played by the investment banks, let’s understand the nitty-gritty of the underwriting process.

Understanding the Underwriting Process

In the contemporary financial landscape, underwriting has become one of the most crucial functions. From insurance to the stock market and banking underwriting is omnipresent in this industry. In the most generic sense underwriting process can be described as the practice of undertaking the risk associated with a venture in lieu of a specified premium amount to be borne by the party initiating the venture.
The process of underwriting in the case of the stock market involves determining the price of a given security and assessing the risk involved with it. The underwriting process in the context of the stock market differs from the insurance and banking sector. Underwriting in the insurance industry involves determining the risk and setting up the premium amount for a particular client based on their exposure. In the banking scenario underwriting assists in the crucial function of appraising the creditworthiness of a potential customer through their past financial records.

Investment Banks in the Underwriting Process

From guiding on alternative investment opportunities to assisting in mergers & acquisitions and facilitating the underwriting process, the investment plays a holistic role in the functioning of the global economy. In addition to this investment banks also aids in asset management for large investment funds and individuals with high net worth.
Investment banks have a crucial role to play when it comes to underwriting in the context of the stock market. The role of investment banks in the underwriting process begins as a pre-underwriting advisor and continues even after the distribution of securities in a similar capacity. The investment banks do a thorough financial analysis of the company before underwriting any security to determine the real value of securities and publish relevant information for the perusal of investors who will likely purchase the stock.
You must’ve heard of Initial Public Offerings (IPOs) which is where the investment banks have a frequent intervention. The investment banks play the middlemen by acting as the mediator between the corporations who have to go public with the IPOs and the investors who are eyeing for the stocks of the company. So what investment bank does here is it purchases the shares of the corporation going public and then, in turn, sells those shares through a stock exchange.
This process is complicated and needs assessment of the fair price of the shares for the company going public. This involves a fair amount of risk in case the IPO is not subscribed fully when selling through the exchange, for this the investment bank charges a premium. In the case of big corporation’s IPOs, there are multiple investment banks involved so that the risk for any single investment bank is not paramount.

Furthermore, there are three types of commitment in the underwriting process that is carried out by investment banks in the case of IPOs.

1. Firm Commitment
In this case, the investment bank as an underwriter agrees to buy the entire issue of shares by the firm going public at an agreed-upon value per share. Any financial loss in case the shares are not fully subscribed is borne by the investment bank.

2. Best Efforts
In this scenario, the investment banks agree to sell as many shares as possible at the agreed-upon value per share. It doesn’t have any obligation if it fails to fully sell the shares to the public, so it is not legally accountable for the unsold shares of the company going public.

3. All or none
The name is very self-explanatory and doesn’t require much guidance to understand. Under this scenario, the underwriter will only get the deal if it can help sell all the shares issued by the firm at the agreed-upon value per share. If they fail to sell the entire stock they will be discarded from the agreement.

How Tough is Investment Bankers Life

Posted on by Imarticus Learning

Responsibilities of an Investment Banker

The Finance industry is for the opportunists, most people aim to get into finance because the remuneration is far more lucrative to pass on. Investment banking seems to be everybody’s dream job or at least for those who just seek the perks and not the work hours involved. The job role of an investment banker is very dynamic and takes a combination of hard and soft skills to succeed and thrive in the face of competition.

The traditional investment banking criteria puts an investment banker’s job as helping the clients raise capital from the market by using the tools of debt and equity after thorough analysis given the client’s need and capital requirements. The job role has much more in its purview; let’s breakdown some of the key responsibilities of an investment banker.

Finding business opportunities for the company by interacting with new prospects and maintaining the relationship with the old ones

Preparation of financial models for suitability of capital structure for mergers and acquisition deals or other capital raising expeditions

Formulate recommendations on various financial product offerings

Perform thorough company analysis, doing due diligence and documentation for transactions

How to be an Investment Banker?

Most people aiming for a career in the investment banking segment often wonder what is the best approach to land the job of an investment banker. Newcomers are often puzzled by what it takes to be an investment banker and how can they kickstart their careers. It can be rather confusing given the dynamic nature of the job that requires you to work on multiple aspects.

To enter the field of investment banking the best approach is to do your majors in finance, commerce or economics, this provides you with an edge by building a solid foundation and a robust knowledge base. It provides you with an in-depth understanding of the finance industry.
In the contemporary scenario the competition in the industry in on an unprecedented scale, to steer clear of the competition in the industry you can pursue a Master’s in Business Administration (MBA) with your specialization in Finance. This will not only consolidate your stand but will also give you a comprehensive understanding of the world of Finance.

There are courses designed specifically for entering into the Finance industry such as Chartered Financial Analyst course, it takes a holistic approach and covers all possible aspects of your financial education, the subjects include Alternative Investments, Financial Reporting & Analysis, Corporate Finance, Economics, Portfolio Management, Ethics, etc.

What separates investment banking jobs from other jobs in the finance industry is the fact that it requires much more than just a good technical knowledge of the finance industry. Investment baking jobs require stamina to work long hours and by long hours we are talking at least 70-80 hours a week.

It requires people to have good interpersonal skills to meet and connect with the client, socializing with people is a must-have skill here. Other than that, it also requires effective communication and presentation skills. If you are striving for a career in this industry you need to have a lot of patience and stamina to do hard work, there’ll be no work-life balance here at least in the initial days and entry-level positions. However, the perks are equally rewarding and satisfactory if you manage to survive the initial phase of this career.

Conclusion

Yes, it is tough to work as an investment banker, if anybody says otherwise, they are keeping you away from the reality of the job. It looks all glorious from the outside but it requires hard work, perseverance, and determination to succeed as an investment banker.

Also Read: Tips to Become Investment Banker

Will an MBA Help You Become an Investment Banker?

Posted on by Imarticus Learning

Investment Banking as a Career

The investment banking industry offers one of the most lucrative and rewarding career prospects for individuals aspiring to make a mark in the finance industry. So what’s so lucrative about the job that so many people want to join it?

Well, at first glance, the remuneration certainly seems like the cherry on top and that makes it far more lucrative for those who want to make a fortune for themselves.

Most of the people who aspire to become investment bankers are unaware of the work it takes to survive in this industry, let alone thriving. If you are dedicated and hardworking with good financial acumen and social skills, you will certainly go a long way in this sector.

best Investment Banking courses with placement in IndiaThose of you who are only charmed by the high-profile deals and monetary benefits and not the work won’t survive in the long run in the investment banking sector. The role of an investment banker is very dynamic and involves overviewing a lot of things.

From networking with your clients and industry experts to researching and conducting complex financial analysis, there’s a lot that you need to do for being a successful investment banker.

It is certainly one of the best choices if you are passionate about finance and investing and won’t mind working 60-70 hours per week. One of the most mainstream questions is how to become an investment banker and will an MBA degree help or not.

Let’s delve deeper into the subject to obtain a comprehensive understanding of the matter.

Will an MBA Degree Help?

So coming to the big question, will an MBA degree help you break into the investment banking industry? Is it worth getting an MBA in investment banking? Well, at first glance, yes, an MBA degree surely improves your chances of getting into the investment banking industry but it’s not a necessity in many cases. If we go deeper into addressing this question, the answer is very subjective and highly varies from person to person.

There are a lot of factors that count when getting into the investment banking segment. First and foremost is your educational background, it has a huge role to play as it helps to establish your foundations. So, let’s take an example, there are two people named A & B. A has always been driven towards business and commerce and has an educational background in the same domain. B, on the other hand, has a technical background and pursued engineering.

best Investment Banking courses with placement in IndiaLet’s say A pursued an undergraduate program in Business Administration or Commerce. The chances of A getting a job as an investment banker straight after completion of this under graduation program is higher as he is already aware of the basics of investment banking.

Comparing it with B who has a technical background, A will surely beat B if they both are to apply for an investment banking job in most cases.

B can now improve his/her chances of getting a job in an investment banking firm by completing an MBA degree in Finance as it will fill up the knowledge gap, A too can opt for an MBA and improve his chances further for getting a high profile investment banking job.

So, there are two aspects to this whole scenario, first, what type of job are you looking for? Is it an entry-level or a high-profile one? Secondly, what is your educational background? Have you completed any investment banking courses?

So if you are looking for an entry-level job and you have a relevant educational background then you don’t need an MBA degree to break into investment banking. However, if you are looking for a high-profile job then an MBA degree will surely help as it adds more credibility to your profile.

In case you don’t have a relevant academic background and you are looking to switch from a different industry, an MBA degree will surely help your cause. If you are short on time and monetary investment then an investment banking course will help you land a decent job in this industry.

What is Investment Banker’s Job?

Posted on by Imarticus Learning

What is Investment Banking?

Investment banks are specialised divisions in the banking and finance industry that primarily deals with high-profile clients and corporations to help them raise funds from the investors or the public. Investment banks act as mediators between investors who are looking for profitable investment opportunities and borrowers who are seeking funds to grow and expand. Investment banks also act as underwriters in case of Initial Public Offerings (IPOs) and help their client raise funds from the public by issuing shares.

They conduct thorough research and evaluate the company’s worth that is reflected in the price of share set by the investment banks. Investment banks also perform additional functions like providing investment guidance to clients on specific financial tools and products. They also help companies with the merger and acquisition deals to identify the best fit for them. Let’s delve deeper into the roles and responsibilities of investment bankers and how they add value for the investment banks.

Roles and responsibilities of an investment banker

Investment bankers have a huge role to play in the functioning of an investment bank, the role of an investment banker is very dynamic, to say the least. Investment bankers have a wide range of responsibilities and in the aggregate, they help to effectively channel funds in the economy by connecting borrowers with investors. The primary goal of any investment banker is to help raise capital for their clients by leveraging their network and expertise.
The exact set of responsibilities of an investment banker might vary depending on the type of firm they work at and the capacity in which they are working there. There are two ways of raising funds for a corporation, i.e. debt and equity. In case of debt, a corporate bond is issued by the corporation seeking to raise funds; the investors buy the corporate bond and loan out the funds to the company. The company that has issued the debt has to pay interest on the loan amount as per the terms and conditions of the agreement.
Another way of raising funds is by selling the shares of a corporation using Initial Public Offering (IPOs) Investment bankers are responsible for helping with the valuation of the company which is about to go public. They help to find the optimum price for the company’s stock to avoid the case of under subscription. The launch of an IPO has a major impact on the company’s success. Good investment bankers help to boost the success probability for a company’s IPO.
Another major roles and responsibilities of investment bankers are to help facilitate the merger and acquisition deals. Mergers and acquisitions are done by the companies to profit collectively from improved synergy and avoid competition in the market. Companies also enter into merger and acquisition deals to venture into new market segments and expand territories efficiently. Investment bankers work in an advisory capacity to help facilitate the mergers and acquisition deals by leveraging their large professional network and expertise in the domain.

Investment banking career

Investment banking is considered as one of the most prestigious career options in the financial domain and is among the most rewarding career opportunities in the contemporary. Its lucrative perks and remunerations also invite a lot of competition. You need to stand out from the competition to succeed in this field. It requires a lot of dedication and hard work to become a successful investment banker. One can opt for an investment banking course by reputed institutions like Imarticus learning to obtain practical knowledge & skills that will help to boost their job prospects and help them stand out from the competition.

Also Read: How To Become Investment Banker

What is Investment Banker?

Posted on by Imarticus Learning

Finance has become a very popular career option these days. Also, it has various roles to offer. Finance comes with a lot of technical aspects and requires a lot of in-depth knowledge of the subject. Investment banking is one such field where your financial knowledge is put to use. An Investment bank is a financial institution that offers a lot of financial services. These institutions have expertise in handling complex issues related to finance such as underwriting, investments, etc.

Who is an Investment Banker?

An investment banker is a person who works in these investment banking institutions. He or she is responsible for raising capital and other sources of funds for the investment banks in which he or she works. Also, these investment bankers give financial advice to people on stock trading and raising capital. These bankers also assist people with complex financial transactions.

People hire Investment banker courses to help them with different mergers and acquisitions. These people also take care of various securities and trade them to raise funds. Investment bankers are the people who are well-versed with all the technical aspects of finance. They know how to manage finances and put it to best use.

An investment banker has to perform multiple roles. He also assesses risks associated with a particular project or with the financial profile of a particular client. These people give expert bits of advice on handling finances. They also help out people with stock trading.

They also provide financial consultancy to all kinds of organisations including companies, NGOs, Business Co-operatives, etc. Another role which an investment banker takes up is of setting up prices for different securities. They also navigate different regulations and set up working for different securities. Investment bankers act as an intermediary and manage funds and securities for different companies.

They can manage career both independently and through an investment banker or a similar institution. Investment bankers use the mark-up mechanism to earn their share of income. This mark-up is huge and you earn a lot from these mark-ups. These bankers earn a lot through securities’ pricing. Investment banks with the help of these professionals take risks and are then rewarded for these risks in the form of profits.

Investment bankers have been doing their jobs with utmost precision for years now. They know how the market works and they put a lot of time studying these markets.

How to become an Investment Banker?

Being good in finance is a pre-requisite for becoming an investment banker. Investment bankers have spent years to gain expertise in this field. So, they are highly paid. An investment banking course can help your cause. You have to be very skilled to excel in this particular career domain.

To become an excellent investment banker, you must have a stronghold on stock markets and the different types of securities. You can take up a course to learn about financial markets and their workings. Also, you must have enough knowledge about the pricing of securities and should know how to price them as your profits are going to come from those prices.

Investment bankers do well when the market works in their favour. A lot of investment banks prefer taking people who have an MBA in finance but you can also venture this field with a bachelors’ degree and a good skill set. The career path of investment banking is highly competitive and you have to outperform yourself with all your deals and negotiations to survive in the market.

Conclusion
Investment banking has become one of the most desirable jobs recently. With the right skill set and training, you can work wonders in the field.

What do Investment Bankers Really Do?

Posted on by Imarticus Learning

Investing banking division is a specialized segment in the banking and finance industry that primarily focuses on raising funds for companies by connecting them with investors.

The investment banking field has shown exponential growth in the last few decades as we progress towards a more globalized world where funds can be free transferred between economies of different nations. The role of investment bankers is also very crucial as a lot depends on the performance of investment banks.

So what do investment bankers really do? The role of an investment banker is very dynamic and encompasses a range of activities such as helping clients to raise money, analyzing the market, networking with prospects, financial analysis, financial advisory, etc.

Let’s understand this more contextually by analyzing the functions of investment banks and how they add value to the economy’s growth prospects.

Investment banks as underwriters

Investment banks provide underwriting services to companies who are about to go public with their Initial Public Offer. Underwriting can be explained as a process in which an individual or institution takes a certain financial risk for a premium or fee. The risk element might include loans, insurance or investments. Now, before taking such risk the modern-day investment banks conduct thorough research to find out the degree of risk associated with a particular deal.

This extensive research will help to set an optimum premium amount on the financial transactions. In case of investment banks working as underwriters, they are required to raise the capital amount for their clients from investors by issuing either debt or equity securities. There are three types of underwriting commitments provided by investment banks to their client these includes firm commitment, best efforts, all or none. Let’s explore this in details.

• Firm Commitment
In case of a firm commitment underwriting service, the underwriter has the full responsibility to buy the entire stock issue at a fixed price decided in advance based on the research. Even if the underwriter fails to sell the entire issue they have a legal obligation to accept the deal.

• Best Efforts
In case of best efforts, the underwriter commits to sell as much of the issue as he can but without any legal financial obligation. This means that if the stock issued is not fully subscribed by the public then the investment bank will not have a legal obligation to pay for the unsubscribed shares to its client.

• All or None
This is a very special case of underwriting where the deal stands canceled if all the stocks issued are not sold out. If the stocks are not sold to the buyers are the predetermined price then the underwriter will not receive any form of compensation for their services.

Mergers & Acquisition services
Investment bankers play a significant role in facilitating mergers and acquisition deals between two or more companies. The investment bankers play a crucial role by determining the fair price or value of companies involved in the M&A deals. This requires conducting extensive research, studying the industry and competitors, identifying the financial position of the company, and a lot more.

A strategic plan is needed by organizations who want to acquire or merge with companies in the same domain. This is where investment banks come into the picture and add value by leveraging their network and professional expertise to find out potential target companies.

In addition to this, the investment bankers also guide their clients involved in the deal on how to finance the M&A deals. They study and design a suitable capital structure for their clients and also guide on financing methods to maximize profitability without diluting ownership.

Also Read: Prerequisites For Becoming an Investment Banker