What does an Investment Banking Analyst do?August 2, 2016
Here is a brief explanation of the investment banking analyst terminology involved.
Debt investment banking markets involve a blend of trading and sales. If a debt is raised then the company pays interest to the holders for borrowed funds and does not involve ownership decreases as in Equity funds.
There are three forms of funding involved in the debt financial markets
The mutual funds:
The definition is a sum of money collected from investors with the intention of making sizeable profits. Just as when you deposit money into the bank to earn interest, the money collected is invested in other assets like debt funds and other money markets for a small fee. The profits or losses are calculated on NAV of the fund money after deducting expenses. It is a partnership effort where both losses and gains are shared based on one’s share in the fund.
Those funds invested in company debentures, government bonds, and other fixed assets are considered low risk as they provide a fixed percentage of income on maturity and when traded in. The term debt means the fund loans the money to the company invested in for a fixed return.
Those funds invested in company shares or in buying stocks and equities in promising companies carry a high degree of risk and provide higher returns when traded in or sold. The term equity means the fund is used for buying a share in the company invested in.
The Equity Market has three categories:
Equity Funds: This mainly deals with IPOs, raising capital, financing deals, etc.
Syndicated: This interbank transaction involves multiple-bank equity deals.
Convertible Bonds: Debts that convert into a share in equity help raise company capital through the issuance of such convertible bonds.
Both the debt and equity financial markets offer immense opportunities for financial and data analysts. Debt Capital Markets that are debt-based involve lesser amounts of financial modeling when compared to Equity Markets being higher in volumes since global credit outstrips global equity in the markets. The environment in debt markets is fast and deals culminate rapidly. This is also a lesser risk market.
Investment Banking Analyst Work
- Preparing reports affecting decision making.
- Financial and data modelling.
- Conduct analysis and research of financials.
- Dealing with client debt-portfolios and issuances.
- Sales and promotions of financial instruments.
- Creating market and data reports.
- Presenting and justifying emerging trends and case studies.
Investment Banking offers many job and career titles and routes. The main areas are in
- Boutique or bulk-investment banks
- The real-estate segment
- Firms on the Sell or buy side.
- Insurance and Fintech sectors.
- Companies involving investment decisions that are data-driven.
- Brokers and their firms.
- Company acquisitions, sale or mergers.
- Raising capital and fund-sourcing.
- Stock markets and players of private equity.
The Investment Banking Job Role
The role of an investment banking analyst would typically involve pattern finding, providing insights, reports and research into trends, errors etc in databases which can successfully be used to base decisions on, detect errors, forecast, make data-justified predictions and such tasks helpful to investments of clients both external and internal. The analyst is all important in the making of management and operational decisions based on financial and investment data. Though investment-related the analyst’s decisions have far-reaching consequences in managing workflow and processes, inter-department connections, business models, and technical infrastructure involved. They are responsible to spot and present trends that affect employee productivity, overall efficiency, management decisions and operational workflow.
Across the board of enterprises, companies, banks, and other industrial verticals the role of an analyst is fast becoming a good career decision. And in investment banking, the lucre and prestige associated is a big draw.
Though there are no educational criteria fixed for the analyst’s role, graduation with subjects like statistics, business management, economics, mathematics, computer science and finance, do go a long way in being efficient in this job role. Since data means control of literally every decision today, the analyst also needs to be adept at using data skills for using the latest technology to enable decisions and impact efficiency, productivity and further growth. Doing a professional course in financial data analysis from a reputed institute like Imarticus adds great value. Such investment banking analyst training also leads to certification and helps you enhance your resume while furthering your prospects and career growth.
Why Investment Banking Analyst Certification Is Important?
Yes, many analysts need certifications which may be a pre-condition especially in the banking sector as a true measure of your skills and being job ready. Doing such a course allows the investment banking business analyst with training that focuses on hands-on live projects and practical skills. The obvious advantage of skills enabled through a global practical-oriented curriculum, sufficient industry-relevant applications and projects, workshops, quizzes and assignments and help in the certification exams makes such courses a logical must-do.
Gaining Technical Skills:
Most analysts pursue investment banking analyst courses at Imarticus to hone their data-analytics skills with the latest technologies, advanced techniques, industry-accepted norms, tricks and best-practices. Certifications in investment banking and financial analysis are relatively new and insist on the acquisition of practical skills to apply theoretical knowledge imbibed in the courses. Classes can be generally be availed in the classroom, self-paced learning and online virtual classroom modes. This also provides working professionals with the opportunity to change career tracks and adopt newer skills to their portfolio.
Job Scope and payouts:
According to Payscale, the analyst roles can fetch lucrative payouts which start with 67,000$ pa. Incentives and bonuses depend on the performance and can match the salary. The demand for trained and certified professionals is very high as these fields and the technology involved is constantly being upgraded.
Remember that an investment banking analyst deals with management and operational aspects of financial investments. Expect a lot of hard work and long hours to be a part of the job. Its handsome payouts mean your career decision should be based on your inherent interests for numbers and management practices. In conclusion, of the many courses available for certification especially in the banking domain, Imarticus courses score high. By doing the course and certification with Imarticus Learning you can carve a career for yourself as a Business Analyst in the banking domain.