Interestingly, the first thing about investment banks is that they’re not banks – not even by the most creative reckoning! They neither collect money in their accounts nor loan money. The other thing about investment banks is that they deal only with institutional, organizational, corporate or government clients – and never with individual investors – unless these investors are individuals are billionaires from the families of Rockefellers or the Rothschild’s!
Investment banks should be most simply understood as firms that help companies and institutions raise funding and grow their client’s organizations and investments. They’re specially organized, equipped and licensed financial services and advisory organizations mandated to primarily help companies and governments raise money (for projects etc.,) through primary and secondary equity and debt, bond and derivatives markets.
Indeed, all investment banks, hence, manage end-to-end documentation; underwriting of equity or bond issues; valuation of companies before acquisitions and mergers; and design and management of investment portfolios of large organizations. In many markets, investment banks also manage wealth of extremely rich individuals – high net-worth individuals with billions of dollars of personal wealth.
The top global investment banks – those in the so-called Bulge Bracket - comprise Goldman Sachs, JP Morgan and Morgan Stanley, but by no means they’re the only ones around. There are numerous regionally oriented or situated investment banks – like Piper Jaffray - in the middle market dotting the investment banking landscape and completing the global investment banking eco-system. Then, there’s the group of small, specialized firms called boutiques, oriented toward specific industry verticals; or focused on just one or two investment banking horizontals instead of doing everything that the bulge bracket guys do. Hence, you’ll find boutique investment banks specializing in bond-trading or M&A advisory, or underwriting or equity markets or derivatives etc.
Typically, large investment banks work through voluminous groups within them covering a range of client-facing or operational areas. But in most firms, we can see three key divisions:
Investment banks employ some of the finest white-collar talents from business schools, and the bare minimum expectation – besides the pedigree – is a combination of strong analytical and interpersonal skills.
Indeed, specific skill-sets demand vary across jobs and roles – brokers need to have killer sales-skills, whereas, equities analysts would demand both analytic and interpersonal skills.
Though only the very best of the talents eventually make it into the best investment banks, to be fair, even rookie-undergrads are let in by them to join the Analyst roles. MBAs join a rung higher – as associates. Analysts and associates work within specialized groups (domains or horizontals) but they may not always have control over the group to which they get assigned (analysts especially).
Investment Banking Career Path
What it Takes to Succeed in Banking
Summer analyst responsibilities include developing client presentations, gathering information, building financial spreadsheet models, working on various projects to support client relations, and assisting banking teams with day-to-day responsibilities.
The responsibilities of a summer associate are similar to that of a full-time associate in the Division. We staff our summer associates on a variety of client and deal assignments throughout the summer.
The responsibilities of Analyst are to help with project work, develop and prepare marketing presentations, analyze client equity and fixed income portfolios, research current trends and assist with trading and offer general client service and team support.
Over a three-and-a-half-year period, you will be exposed to transactions in many areas, across different industries, regions and products, all the while developing banking and managerial experience that will prepare you for senior deal management. Day to day responsibilities might include planning, structuring and executing financing transactions in the public and private markets, advising corporations on mergers and acquisitions, and devising and executing strategies that enable companies and institutions to capitalize on the value of real estate assets.
The primary role of the Vice President is to be the “project manager,” whether for marketing activities or on a transaction. It is the VP that typically decides the structure (usually the Table of Contents or “TOC”) of the presentation (e.g. a pitch book). On live engagements, the VP is typically the banker “running the deal.” The VP must manage the client, manage the senior bankers and manage the Analysts and Associates that are actually doing the work. It is often at the VP level that bankers begin to form valuable relationships with clients. Depending on the individual and also the bank, some VPs will start to play a role in client development and marketing.
The Director or SVP may either act more like a Managing Director (play a high level client development role) or more like the VP (play a project manager role). Sometimes, the Director/SVP’s role will depend also on the specific situation and/or other deal team members. Ultimately, for Director/SVPs to be promoted to Managing Director, they will have to demonstrate that they can form client relationships and have the ability to market and to bring in new business.
As the senior level banker, the role of the Managing Director (“MD”) is mostly one of client development. The MD will likely be the one with the senior level company relationships (CEO, CFO, head of Corporate Development) and is typically responsible for spearheading marketing efforts. On a live transaction, the MD often plays only a minor role, getting involved when difficulties arise in the deal and during high level negotiations.
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