Despite being challenging, careers in investment banking are among the most profitable in the industry. As a start, you can assist companies, governmental agencies, and other clients in achieving financial success in addition to having a hand in real-time financial markets. Investment banking is a fantastic stepping stone to more established professions in finance, so you have significant opportunities for professional development and self-realization in the future. For more information about what do investment banking analysts do, including job descriptions and pay in the US, continue reading.
What is investment banking?
Businesses and financial markets are connected through investment banks. By organizing mergers and acquisitions, offering financial guidance, trading stocks, and monitoring market trends to assist clients in making wise financial decisions, they assist their clients in becoming public.
Investment banking analyst
The backbone of the investment banking team, investment banking analysts frequently join the bank straight out of prestigious undergraduate programs and enroll in a two-year analyst program that starts in late summer after graduation, with the option of a third year in some circumstances.
Job Description for what do investment banking analysts do
- Creation of several financial model types for valuation of debt and equity in capital raising transactions, mergers, and acquisitions.
- Utilize a range of valuation techniques, such as DCF, precedents, and comparables.
- Make product offers, private equity transactions, M&A, and valuations.
- Brochures, management presentations, and investment memorandums are just a few examples of the financing materials you can prepare and assess for clients.
- Fostering ties with both existing and potential customers to expand the company.
- Research, analysis, and recording of active transactions are needed in addition to an audit of the transaction’s object and legal purity.
- Making presentations for client portfolios.
- Strong interest in current affairs, significant problems, and news.
Investment banking analyst knowledge, abilities, and experience that are pertinent
- MBA (Associate position) or a comparable combination of education, training, and work experience is needed.
- Bachelor’s degree (for an analyst position) or its equivalent from the target institution
- Three years of junior-level work experience in business or finance, preferably in the area of quantitative indicators
- The capacity to operate independently in a challenging team context.
- You must comprehend both closing principles and deal structuring.
- Excellent networking and communication abilities.
- Excellent analytical, quantitative, and research capabilities, particularly when it comes to describing market occurrences.
- Shown proficiency with Microsoft Office tools, particularly Excel and VBA.
- You have the ability to arrange and keep track of duplicate jobs and assignments with frequent priority changes.
- Outstanding abilities in financial modeling.
Typical Roles of an Investment Banking Analyst
A skilled investment banker will be able to do intricate financial modeling in addition to having strong mathematical abilities. Investment bankers who have the capacity to appraise the situation immediately while focusing on other matters will succeed as the task moves along quickly.
I-Bankers frequently hold degrees in accounting or, in some situations, finance. On the other hand, a career in investment banking is not assured by a degree. Perseverance, persuasion, networking, and communication skills are requirements for the position. Investment banks also frequently look for graduates from elite universities like Harvard or Dartmouth, where a liberal arts degree is far more prevalent.
This job description for an investment banking analyst is based on duties outlined by companies including Goldman Sachs, Morgan Stanley, Credit Suisse, UBS, and Barclays.
Career Opportunities for Investment Banking Analyst
For entry-level professions, investment banking pays higher than the majority of other degree programs. But doing so means working long hours in a stressful workplace. Although extremely competitive and frequently requiring exceptional scientists, it offers promising job opportunities. Investment banking analysts often hold their roles for three years; after that, a wide range of career options, including more senior positions in investment banking, private equity, venture capital, and hedge funds, become accessible.
Salary of an investment banking analyst
How much money can you expect to make as an investment banking analyst? The location you live in, the length of time you work, and the company you work for all affect your investment banking analyst compensation. In the United States, an investment banking analyst will make an average income of $86,643 in 2020; however, salaries might range substantially.
Investment banking analysts also get an annual bonus on top of pay that is determined by their firm’s and their personal success. This bonus will probably be more than $50,000, and in some cases, it might even be greater than your yearly pay. Though analysts in investment banking can earn a lot of money right out of college, they often put in a lot of overtime. They put in an average of 100 to 100 hours every week, which is not unusual.
Financial analysts, particularly investment banking analysts, can obtain occupational data from the US Bureau of Labor Statistics (BLS). Between 2019 and 2029, the BLS predicts a 5% growth in the number of jobs for financial analysts. This nearly corresponds to the BLS’s projection of the average job growth across all occupations from 2019 to 2029.
By advancing corporate and individual enterprise and creating legal and financial documents to accomplish an investment, acquisition, or purchase, investment banking analysts guide and support customers. When necessary, they locate close and potential investors, assess risks, and offer their financial advise. They keep up-to-date knowledge of all relevant legal and regulatory concerns in the financial sector. They must have a bachelor’s degree in finance or a closely related discipline, at least three years of experience as an investment banking analyst, and in-depth understanding of transaction structuring, rules, and closing protocol. These are all what do investment banking analysts do.