Besides being lucrative, Investment Banking is one of the most competitive areas for aspiring candidates to enter the banking industry. Mostly, investment banks seek
to recruit candidates who come from top universities and business schools. In order to start a career in investment banking,
you need to have excellent analytical abilities, communication skills and aptitude for numbers.
Career Options
Investment banking is one of best options for candidates who possess drive, confidence and stamina. It is not meant
for the feint of heart, as investment banking requires very a strong personality. Stamina and drive are both important, as
financial services industry employee work long hours, particularly when they have to deal with deadlines. Generally, the working
hours of an employee in investment banking ranges between 60 to 70 hours. However, during busy times, working hours may extend
through the weekend.
Investment banking is composed of different sectors within which you can choose a suitable
career. Investment banks also have various divisions within different sectors. When applying to a bank, candidates should
make up their mind about which area they would like to join. The choice of area depends on their abilities and interests.
Some of the sectors in investment banking are as follows:
Corporate Finance: Corporate finance includes a range
of areas such as debt and equity capital, appropriate capital structures and mergers and acquisitions. Advisory services include sector specialists,
who are supported by several general service teams.
Sales And Trading: Sales and trading is considered to be one of the most popular areas of work in the field of investment banking. A number
of employees are required to work within the sales and trading departments. The work calls for hard working people with the ability to
think fast and make key decisions in just seconds. The basic role of a sales and trading employee is to inform clients about
the opinion of the bank on certain assets and markets.
As sales and trading staff spend most of their working
hours in talking to clients, it is important for employees to have strong communication skills. Additionally, employees working
in the sales and trading department in investment bank need to have a complete understanding of the research produced by their
company. They should also be able to present sophisticated arguments in a convincing manner to a very sophisticated client
base.
Research: Employees working with the research department provide clients with up-to-date reports on certain
areas of interest. Analysts in the research department specialize in a specific business sector or area, thereby developing
reports that can be safely distributed to clients. Besides having effective analytical abilities, good analysts working with
the research department in investment banking need to have effective communicative skills, ability to think clearly and present
clear ideas with confidence to the clients.
If you have a great amount of drive, determination and stamina, a
career in investment banking could prove to be very lucrative, exciting and rewarding.
When most out there decide they want to do investment banking, they usually go after the big names: Goldman
Sachs and Morgan Stanley.
But sometimes going to one of these places is not a realistic option. If the hiring market
is bad, if you have no previous finance experience, or if you are making a career change, it will be all but impossible to start at the top.
If this is
the case, you should consider the boutique investment bank. The term is used differently all the time, but generally refers to both "middle-market" banks that have an international
presence but just work on smaller deals than the brand names, as well as to true boutiques that might only have 1 or 2 offices.
The Main Difference Between A Bulge Bracket And A Boutique
People usually say the size of deals makes the
difference. While Goldman Sachs may advise on $100 billion acquisitions, a boutique will usually stick to deals under a billion dollars and often far less than that. That may sound like a lot of
money, but it's almost nothing to huge companies.
Other commonly cited differences are working in smaller groups
at a boutique, getting more responsibility, and doing more than just crunching numbers.
These can be true, but
I don't think they're 100% correct. The main difference, in my view, is that boutique experiences are much more random
than those at bigger banks.
Fooled By Randomness
You can get good experience at a boutique and learn
more about deal-making than you would at a bulge bracket. But you might also spend all your time doing useless work if the
senior bankers can't make rain.
I've seen both happen. One friend at a boutique learned the job in 3 months
because of all the responsibility he took on; another friend spent most of his time making coffee and doing administrative
duties!
You may get a "better experience," but your chances of having good exit opportunities are much
higher at a bulge bracket.
But Is It The End Of The World If I'm Working At A Boutique?
No. But
if you do go that route, you should very carefully investigate the work environment, deal flow, and everything else before
jumping in. To get a more accurate view, try speaking with Analysts and Associates rather than higher-ups.
There
will still be much risk because of the time lag between when you interview and when you start. Boutiques are particularly
vulnerable to "star" employees leaving and causing havoc, significantly impacting the business.
In the end, I would recommend going to a boutique
only if you have absolutely no other options or if you have some kind of personal connection with the firm or know a wide
circle of people there.
Otherwise, do the safe thing and go to the top name.
