Tag: investment banking

Investment banking is a crucial part of the financial world. It plays a vital role in capital markets by connecting investors with businesses that require funding. Investment bankers are responsible for managing and executing complex financial transactions that facilitate capital formation, mergers and acquisitions, and corporate restructuring. In this article, we will explore the role of investment bankers in the financial world, what they do, and why they are important. We will also discuss how FMI’s investment banking pathway can help those interested in pursuing a career in this field.

What is Investment Banking?

Investment banking is a financial service that helps businesses and governments raise capital by underwriting and issuing securities. It also provides strategic advice to companies on mergers and acquisitions, corporate restructuring, and other complex financial transactions. Investment bankers act as intermediaries between issuers of securities and the investors who buy them. They help companies determine the most appropriate method of raising capital, whether through an initial public offering (IPO), debt issuance, or private equity.

Investment bankers are divided into two main groups: the front office and the back office. The front office is responsible for generating revenue and includes roles such as corporate finance, sales and trading, and mergers and acquisitions. The back office supports the front office and includes roles such as operations, risk management, and compliance.

What do Investment Bankers do?

Investment bankers are responsible for managing and executing complex financial transactions that facilitate capital formation, mergers and acquisitions, and corporate restructuring. They provide strategic advice to companies on how to raise capital, structure deals, and navigate the regulatory environment.

Capital Formation:

Investment bankers help companies raise capital by underwriting and issuing securities. They work with issuers to determine the most appropriate type of security, such as equity or debt, and the most appropriate method of issuance, such as an IPO or private placement. Investment bankers also help determine the appropriate pricing for the securities and market them to potential investors.

Mergers and Acquisitions:

Investment bankers provide strategic advice to companies on mergers and acquisitions. They help identify potential targets, negotiate terms of the deal, and structure the transaction. Investment bankers also help companies raise the necessary financing to complete the deal.

Corporate Restructuring:

Investment bankers provide advice to companies on corporate restructuring, such as divestitures or spin-offs. They help determine the most appropriate structure for the transaction, negotiate the terms, and assist with the necessary financing.

Why are Investment Bankers Important?

Investment bankers play a crucial role in the financial world by facilitating capital formation, mergers and acquisitions, and corporate restructuring. They help companies raise capital to grow their businesses, which in turn helps drive economic growth. Investment bankers also provide strategic advice to companies on how to navigate the complex financial landscape and make important business decisions.

Investment bankers are also important to the functioning of capital markets. They help ensure that capital is allocated efficiently by connecting investors with businesses that require funding. By doing so, they help ensure that capital is allocated to its most productive uses.

Investment bankers are also important to the stability of the financial system. They help manage risk by providing advice on the appropriate structure for financial transactions and by ensuring that investors have access to accurate and timely information about the securities they are investing in.

How can FMI’s Investment Banking Pathway help?

FMI’s Investment Banking Pathway is designed to provide students with the skills and knowledge needed to succeed in the investment banking industry. The program includes courses in financial analysis, valuation, and modeling, as well as exposure to real-world investment banking transactions.

The program also includes networking opportunities with industry professionals, including alumni and current investment bankers. Students have the opportunity to participate in industry events and attend workshops and seminars hosted by FMI’s Investment Banking Center.

Conclusion:

Investment banking is a crucial part of the financial world, playing a vital role in facilitating capital formation, mergers and acquisitions, and corporate restructuring. Investment bankers are responsible for managing and executing complex financial transactions that help businesses and governments raise capital and make strategic business decisions.

Investment bankers are important because they connect investors with businesses that require funding, ensure capital is allocated efficiently, and manage risk in the financial system. Without investment bankers, the capital markets would not function as effectively, and businesses would struggle to raise the capital they need to grow and expand.

For students interested in pursuing a career in investment banking, FMI’s Investment Banking Pathway can provide them with the skills and knowledge they need to succeed in this competitive industry. The program is designed to prepare students for real-world investment banking transactions and includes networking opportunities with industry professionals, making it an excellent choice for anyone looking to start their career in investment banking.

In conclusion, investment bankers play a critical role in the financial world by helping businesses and governments raise capital, facilitating mergers and acquisitions, and providing strategic advice on corporate restructuring. They are vital to the functioning of the capital markets, and their work helps drive economic growth and stability. For students interested in pursuing a career in this exciting field, FMI’s Investment Banking Pathway is an excellent choice that can help them gain the skills and knowledge they need to succeed.

Would you like to earn 5-6 figures in salary with lots of bonuses right off from graduation? You can get this by working with a big bank, a finance company, an investment house or even with the Big 4; as an investment banker. It is a high-profile job with lots of critical thinking, analytical and mathematical skills involved. This article will explore the pros and cons of investment banking and how you can get in if you feel this is the career for you.

Here are some of the pros of being an investment banker

  • Huge Compensation: The money you make as an investment banker is one of the main attractions of this profession. The salary is great, running up to 5,6 and even 7 figures. Then there are starting bonuses, performance bonuses and other deferred bonuses that you get later. You can start as an analyst, and grow to become an associate, a VP, a director, a managing director or even a CEO. All these with a salary which increases every year and increases at every level. 
  • Smart Colleagues: A career in investment banking exposes you to working with smart people which includes both your colleagues and clients. You meet with people who are working on real-world problems and people working with the latest technologies. Interacting with driven people helps you learn more and develop faster in your knowedge of the business world. Within a few months of joining, you will get responsibilities which will help you learn a lot in a short space of time as your colleagues will challenge you to put on your best foot always. All these will help in your personal development journey.
  • Good Perks: Apart from the mind-boggling bonuses, there are lots of benefits like free lunch and dinner if you work late at night. If you need to travel for your work, you can be sure of getting the best treatment. You get to stay at the best hotels, and wine and dine at the best restaurants and bars and of course, you have business-class flights. The medical coverage you get working in this career is great, with awesome paternity and maternity leave as well as a great pension when you retire. 
  • Open Doors: This job will open doors for you that other jobs cannot. For example, this job will help you to meet and interact with wealthy people and build a network of great connections. If you decide to leave this job, there are loads of places you can work. You can decide to go into coaching and consulting and you will have lots of clients. You can decide to move into another section or department in a bank if you are thinking of a better work-life balance. You can start your own company with the knowledge you’ve gained working as an investment banker. 
  • You Gain Experience Fast: Working in a high pace environment like the one offered to investment bankers helps you learn a lot about business. You get to learn about brokering deals, negotiating debts, equities, raising capital and much more. Working in a fast-paced work environment all day every day, helps you gain expertise fast. You cannot be compared to someone who works fewer days and will take years to learn what you learn in a few months. You can make a partnership at a young age and start earning millions in your late 30s or early 40s.

But it’s not all rainbows and sunshine. There are some disadvantages involved in this career too. Here are some of the demerits of working as an investment banker:

  • Long Hours: You get to work long hours often staying late at night. Sometimes you stay weekends working in the office. This is a high-paying yet high-stress job. An analyst typically works 80-90 hours with average work hours based on a survey reaching 102 hours. 16 hours days are quite the norm in this career though it gets shorters as you progress up the ranks.
  • No Off-clock: You can’t stay off the clock when working as an investment banker. You are expected to be available 24/7 when working especially when you are just starting. You have to be at work in the evenings, at weekends and sometimes on holidays. This can take a toll on your personal relationships. 
  • Highly Competitive: A career in investment banking is full of competition. The reason is obvious, it pays better than most jobs so there is fierce competition before you can get in. After you get the job you still have to be on your best performance so you don’t get kicked out and replaced by others.

You can see that the benefits far outway the cons, and that is why many people are doing all they can to get into this career. If you are dreaming of getting in as an investment banker, here are the 4 steps you take to make sure that you make a success of it.

  1. Good Education: To start your journey into investment banking, you need to make sure that your foundation is right. You need a good bachelor’s degree in finance or a related field from an accredited university or college. You can also get a graduate degree or an MBA to further qualify yourself.
  2. Certifications: Before and after you get a job as an investment banker, it is good to get a certificate to augment your degree. Having great certificates from reputable institutions will help you scale through during the interview. You can get certificates like Certified Fianal analyst (CFA), Certified Public Accountant (CPA) or Commercial banking & Credit Analyst. 
  3. Job Interview: Passing an interview is a requisite to getting a job as an investment banker. Proper preparation will help you to excel in it. Remember that this job is highly competitive so you need to make sure that you are ahead of the competition. You can check out this course that specifically teaches you how to prepare for an interview as an investment banker. 
  4. Get experience: You can get an internship during your bachelor’s degree program. This will give you the needed experience and develop the math and analytical skill needed for the job. You can also get jobs in banks or work in a smaller finance or investment business while you wait for your dream job. The on-the-job training you get will add to your CV and help you to get better jobs later.

Conclusion

A job as an investment banker comes with lots of perks, and a great salary. You work with smart people, get open doors and gain lots of experiences fast. Even though you get to work long hours, most people don’t mind because the money is great. In 4-7 years of consistent work, you can get to the top and start earning 7 figures with huge benefits. With a few years of consistency, you will make a great income while helping a lot of people with their finances. 

Authored by: Juliet Ugochi, Fintech Content Curator

To stay relevant and competitive, investment banks have adapted new hiring practices in the technology-dominated, post-COVID world. These hiring trends were visible across financial institutions. While in the previous calendar year institutes were worried about staffing and labour shortage, banks were predicting a long struggle for employees to continue to post the COVID-19 pandemic, according to the American Banker. Let’s see how the hiring trends are predicted to be in 2023. 

2023 – Back to ‘Normal’

Employees were instructed in 2021 to strictly comply with Covid guidelines. Many were told that if they weren’t vaccinated, they would lose their jobs or get lower pay. Global financial institutions like Citigroup and JPMorgan laid out a clear Covid mandate and required COVID-19 vaccinations for employees to return to the office. 

Since then things have changed. 2023 seems like a ‘back to normal’ year, and banks are indicating fresh hiring. Investment banks such as Goldman Sachs and Morgan Stanley have dropped their mandates for Covid vaccination and loosened other restrictions. Many other financial institutions have followed the same trend while easing Covid-related restrictions.

High Demand for Accounting and Finance Professionals

Accounting and finance jobs along with other middle office roles performed the best and showcased high demand. This, perhaps, suggests that banks expect their added infrastructure to prove useful in the near future. There is also a concerning fact behind this strong demand. The average age of a financial advisor is 55, and 20%, or 1 in 5 financial advisors, is over 65. This suggests that in less than a decade, over 100,000 of those advisors will retire, accounting for over one-third of the industry workforce. To stay ahead of the problem, banks are changing their hiring and retention strategies and therefore, this trend might only be a cyclical catch-up to avoid future struggles.

Rising number of applicants

According to a study conducted by EFinancialcareers, in London, there is a large rise in the number of job applicants, across the financial sector. As a general trend, for the top 10 job categories, companies have received close to nine applicants for each role, which was previously around six applicants. This is a 50% increase. Competition is rising in investment banking as well. This trend, however, might be limited to London or could be a result of mass layoffs done after the Covid pandemic. 

A slowdown in remote jobs

Financial institutions witnessed a large rise in remote jobs in 2021 and 2022. From 4% in 2019 to nearly 12% in 2022, the share of jobs explicitly stating remote working nearly tripled from the pre-pandemic levels, according to ZipRecruiter data, 

According to a study conducted by LinkedIn, in 2023, the number and share of remote jobs in the overall job market will stagnate or decline, as employers prefer their staff in the office. The study showed that the trend is already underway. On the other hand, remote working is becoming increasingly popular among employees and job seekers. This was evident from the rise in demand for remote jobs from job seekers. 

While current technology allows people to work from anywhere in the world, CEOs from top global investment banks have previously expressed their concerns about remote working due to issues like insider trading, leaking of information, etc. Investment banks have spent millions of dollars in upgrading their infrastructure to make it Covid compliant. This could create a mismatch between demand and supply in the near future. 

Promoting Internships 

Investment banks have been at the forefront of employing interns, recruiting good talent and introducing fresh graduates to the required work culture. Goldman Sachs and other top investment banks are promoting investment banking internships and encouraging participation by women and minorities historically underrepresented in the industry.

Conclusion

Investment banking hiring trends are constantly changing, so you must also adapt accordingly. Major hiring trends to look forward to in 2023 are:  

  • A slowdown in remote working
  • Rising competition in terms of number of applicants per job role
  • A rise in investment banking internships
  • A rise in PE jobs 
  • Increasing use of AI and ML in investment banking

By following the trends and making the necessary changes, you can increase your chances of getting a job. To check out for more details on hiring trends you can also read LinkedIn learning reports.