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An investment banker is someone who works in a financial institution or in a large bank's division that is involved in raising capital for governments, companies and other entities. They raise money by issuing and selling securities in the primary market and assist public and private corporations in raising funds in the capital markets (both debt and equity). They may also provide strategic advice to their clients on specific transactions such as mergers and acquisitions and other types of financial transactions.
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An investment banker will offer a lot of banking services like other bankers do, except they deal with professional businessmen/women, entrepreneurs and investors. Their duties range from raising money, advising, underwriting, brokerage services, forex services, research, and asset management.
There are typically three areas of operation:
giving corporate clients advice with mergers and acquisitions, as well as helping them raise money from the debt and equity market
helps a company save time and money by determining the best strategy and the best place to raise debt or equity capitol. Most companies don't know how to go about this on their own.
prepares necessary documents in order to protect the company and the investor, and to accurately present the proposition for funding (called a 'private placement memorandum').
ensures all government regulations have been followed properly (as there are rules that most entrepreneurs are ignorant of, and this can come back to bite them in the future).
- buying and selling securities and commodities
- analyzing and predicting the movement of stocks
Work is exhausting with 80-100 hour weeks and sometimes nights spent back in the office. An investment banker receives bonuses at the end of the year. For example, a starting salary of $60,000 USD could get $40,000 in bonuses. The bonuses increase by approximately $15,000 per year.
Manish Srivastava, 24, is an analyst at a boutique (Wall Street vernacular for small-sized) merchant banking firm in New York. Before this job, he worked for a year and a half at a much larger global investment bank also based in New York.
Investment banking is comprised of three main areas: investment banking division (IBD), sales and trading (S&T), and asset management.
Private equity tends to be a common exit path for investment banking analysts and consultants. As a result, we get a lot of questions on both the functional and the actual day-to-day differences between investment banking analyst/associate and private equity associate roles, so we figured we would lay it out here.
Investment banking lifestyle questions answered.
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Wall Street has changed in the aftermath of the Great Recession of 2008 and 2009 and that has changed the role of the investment banking analyst.