If you are thinking about a career in investment banking and want to equip yourself with an understanding of the job and best interview preparation practice, this article is for you.
- The job
Depending on what team you are on, generally, the role of an investment banker involves helping clients and advising them on major financial transactions, such as mergers and acquisitions, IPO, corporate restructuring and so on. When companies need to raise capital in the financial markets, either through debt or equity, investment bankers are also there to consult and make that happen. Each deal that a team of investment bankers work on can last anywhere from several months to several years, depending on the size and complexity of the deal. Because of this nature, investment banking jobs usually require long working hours to meet the needs of their clients, and in return, investment bankers are well-compensated.
Companies tend to divide Investment Banking into either Product Groups or Industry Groups. Product Groups are teams that work on a specific type of deal for companies across all industries. They include Mergers & Acquisitions (M&A), Equity Capital Market (ECM), Debt, Debt Capital Market (DCM), Leveraged Financing (LevFin) and Restructuring (RX). On the other hand, Industry Groups are teams that work on a specific type of industry but across all types of deals. The industry groups consist of Healthcare, Real Estate, Infrastructure, Technology, Media & Telecom, Financial Institutions, etc.
- Employer examples
In this field, there are bulge bracket banks like Goldman Sachs, Morgan Stanley, JPMorgan, Bank of America and so on. We also have boutiques, namely Lazard, Jefferies, Rothschild & Co., Evercore, Stifel, etc.
For a more comprehensive firm breakdown, check out this Mergers and Inquisition article. https://mergersandinquisitions.com/top-investment-banks/
- Common career trajectory
Investment bankers typically begin their careers as interns at investment banks. Though this is not a requirement to get into the industry, it provides a solid foundation. After graduation, investment bankers begin as analysts, which lasts for two years. After that, with strong records and qualifications, they can move up to become associates, or junior bankers. With a strong performance record, you can move beyond junior roles to more senior positions.
- How to prepare for interviews
The nature of these interviews are highly technical, so in order to succeed, make sure you brush up on your accounting and financial statements knowledge, and learn how to elaborate on important financial models. You can do this by practicing questions in each of these topics. You also need to learn about the industry group or the product group that you are interviewing for and make sure that you understand it well.
If you have done all these steps, don’t forget to work on behaviorals because they are just as important in the interview process. And lastly, bring confidence to the interview!
