Capital markets are the exchange place for long-term debt between those who have the capital to lend and those who need investments. Essentially, in a capital market, companies in need of money to launch or grow their business can gain access to it through banks and investors. The most widely known capital markets are the stock and bond markets.
Jobs in a Capital Market
If you want to work in capital markets, your role could involve helping companies raise funds by selling equity to investors, designing and managing a company’s stock portfolio, or evaluating a company’s potential financial risks, among others. Various titles can include Credit Analyst, Risk Manager, Fund Manager, and so on.
Regardless of what you do, the role calls for immense responsibility while also reaping the benefits through monetary rewards and perks. As a result, the recruitment process for a career in capital markets is selective. In this article, we share 3 keyways to ensure you make it to that interview call:
1. Knowledge of Finance:
A job in the capital market segment of an investment bank will be a smoother ride for you if you have an understanding and interest in finance. Yet, a finance degree isn’t the only way to gain this. Although most candidates might have a postgraduate degree in finance, this is not mandatory for entry-level positions. In fact, in this FMI podcast, Saloni Tanvi – an analyst at Goldman Sachs busts a few myths related to IB roles and talks about a flourishing team member, who didn’t have a background in finance.
However, you must still have an understanding of finance concepts through courses and online resources as technical questions in the interview can look like these:
1. What is a PEG multiple and when would you use one?
2. Could you describe what an FX forward is?
3. Can you tell me what a convertible bond is?
4. What is the formula for calculating working capital?
5. How do unlisted companies price their issues?
Hence, it’s best to have this in-depth knowledge beforehand so you can answer similar questions without hesitation. Specialisations like financial modelling and business analytics further make your profile stand out and will help you quickly learn the tasks at work.
2. A Rocking Resume
It’s no secret that any interview call almost solely depends on the resume. Hence, you must carefully craft one that helps you stand out. The most important categories in a resume are Personal Information (name and contact), Education, Work Experience, Skills, Volunteer or any other relevant experience.
Specifically for a role in capital markets, it’s beneficial if you can show some experience investing in stocks on a personal level. This will demonstrate that you have the essential practical knowledge about how markets work. You can also gain this through simulations that mimic real-time situations. Two such courses that can sharpen your understanding of markets are the Investment Management and Market Making simulations by FMI.
Further, although you are applying for a highly technical role, remember that non-technical skills can help you stand out the most. Highlight your strengths of negotiation, analysis, communication, and strategic thinking using examples and metrics, if possible. Here is a list of transferrable skills that you can include in your resume.
3. Real-Time Market Knowledge
While textbook knowledge of financial and analytical concepts is quintessential in capital market positions, nothing will prepare you better for these roles than practical and real-time experience. If you are a young applicant such as a fresh college graduate, or better yet, if you are in college, you can plan to gain this experience early through internships or by joining your university’s finance or investing clubs. When you present this information on your resume, you are significantly increasing your odds of receiving the interview call.
Unfortunately, the call to interview, while is an impressive first feat, is not the end of the hiring process. Hence, as soon as you can, it is also extremely important to get yourself acquainted with what’s happening in the world of finance, economics, stock markets and so on. Chances are you will be asked questions such as these during your interview as well:
1. Can you describe your process for evaluating a company’s value?
2. Can you tell me about a company you want to invest in or are already invested in and why?
3. How has COVID-19 affected the stock market in India?
4. How has the Russia-Ukraine conflict affected the markets in India/UK/U.S.?
5. What are the factors behind Sri Lanka’s devastating economic conditions?
So, it’s never too early to brush up on the ins and outs of finance and related fields.
Conclusion
Capital market roles are thrilling and offer an enormous learning curve. If this is a career choice that interests you, we’d recommend that you start preparing early, right from the time you enter university to gain an edge. From thereon, to inflate your chances of getting that much-desired interview call for roles, you’ll need to pay attention in those finance classes, work dedicatedly on your resume, and acquire as much practical training as possible.
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