What are the Different Types of Career Option in Investment Banking?February 9, 2018
To begin we should perhaps be clear about what Investment Banking is. For instance, not everyone who works for Goldman Sachs or Edelweiss is an Investment Banker engaging in Investment Banking. Investment banking roles can also be found across different types of companies. While the most popular investment banking jobs are found at Bulge Bracket Investment Banks like JP Morgan and Morgan Stanley, they can also be found in the Investment Banking units of commercial banks like ICICI Bank and Citibank. They are also found in smaller regional firms like Avendus Capital and Jeffries or more sector focused banks like Piper Jaffray. These are often called boutique banks in India and middle-market banks around the globe. Investment Banking jobs can also be found in large private Equity institutions like Blackstone. But an area a lot of people completely ignore is similar Investment Banking career paths at corporate firms like Reliance and Mahindra & Mahindra, large Multinational companies that engage in large amounts of fundraising, restructuring and, M&A. Many of these companies have in-house Investment Banking units.
Related Article: How to Become an Investment Banker
The different types of Investment Banking Jobs
Mergers & Acquisitions: This is the key role of an Investment Banker and most definitive of the profession.
- Role: Investment Bankers are intermediaries that help a client- individual or company, to buy or sell assets be it companies or stakes in companies. As an intermediary, they provide strategic advice in terms of which industries to enter and which assets to invest/buy after doing a thorough financial and business analysis in the context of the company/clients strategic vision and mission. Sometimes they are part of executing the companies strategic vision and other times they are brought in only to negotiate on the behalf of the company on a single transaction.
- Job description: Regardless of the situation and how the transaction originated, Investment Bankers are expected to build robust financial models to calculate valuation and potential synergies.
- Skill sets: Investment Bankers are not only expected to be highly proficient in fundamental valuation, capital markets, financial modelling and forecasting but also excellent storytellers – pitching a company for sale, marketers, and negotiators with excellent people management skills. Often, during a transaction, they wear many hats including that of an accountant and a lawyer and in many cases, especially during large sell-side transactions, an Investment Banker is almost as knowledgeable about the company as a senior level employee. In the light of such responsibility, pressure and significantly lucrative compensation, Investment Bankers are then expected to work very long hours and do not have great work-life balance.
Fundraising: Investment bankers also help raise money from both the private equity market as well as the public markets on behalf of their clients. While boutique banks like Avendus Capital and Map focus on only raising capital through Private markets like Private Equity firms or High Net Worth Individuals, bulge bracket investment banking units like Goldman and Kotak are Book Running Lead Managers and also help a company tap the Equity Market through an IPO and subsequent rights issues.
Private Equity: Investment Bankers will often move from the sell side to the buy side and join a Private Equity or a Venture capital firm because of their experience with working with companies and understanding the various dynamics with respect to valuation and investing.
Related Article: CIBOP (Certified Investment Banking Operations Professional)
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