Industry Insiders: Investment Banking
Industry Insiders continues as we explore others roles in FINANCE.
For each post in the series, we asked two experienced professionals in different roles to explain exactly what they do in layman's terms.
We covered Research last week and the rest of this edition will cover Investment Banking, Trading and Private Equity.
This week, we’re getting the lowdown on INVESTMENT BANKING.
RS (28 years old) and JT (25 years old) are two talented and successful investment bankers that work at global, large financial services firms in New York City. Huge thanks to this hustling duo for taking the time to share insights on their respective roles!
Q: What is your official work title?
RS: Investment Banking Associate
JT: Investment Banking Analyst
Q: How would you describe your job to a 15 year old?
RS: My job is to provide corporations corporate finance advice and to assess strategic decisions, such as whether or not to raise money (debt or equity) or mergers and acquisitions. With our colleagues in other investment banking groups (e.g. debt capital markets and equity capital markets) we determine the ideal amount of debt or equity to issue and at what price based on market and economic conditions. We also assess the qualitative and quantitative considerations with regards to a merger or acquisition
JT: When really rich people need help managing their money (retirement, college fund, estate planning, etc.), they hire a financial advisor. When a public or private company wants to buy another company or sell their company, they hire investment bankers. Thus, we are financial advisors to public or private companies
Q: What are some things/projects you are responsible for?
RS: I help prepare and present client presentations and internal memos including company, industry and deal overviews. I also leverage company and market research to develop ideas for our clients and perform valuation analyses on behalf of our clients to see if their or our ideas have merit. Other components of my job include coordinating and managing day-to-day work streams such as due diligence when my group is mandated on a transaction for a client (if a client is in the process of raising capital or M&A), traveling to meet with clients to discuss potential alternatives and training junior staff
JT: I conduct financial analysis that varies depending on the needs of the clients as well as build presentations for clients that include different market statistics and benchmarking analysis
Q: Tell us about “the good, the bad, and the ugly” of your role.
The Good: Exposure to C-level executives at an early stage, the potential to be involved in the strategic direction of a company and learning various aspects of corporate finance
The Bad: It's a client service business at the end of the day so you have to constantly adjust your schedule based on client deadlines and needs/wants
The Ugly: There is an element of unpredictability with the role. I've had to cancel personal vacations before and there are still some very late nights
The Good: Learning a lot about financial analysis, becoming very efficient and detail-oriented as a working professional, building strong work ethic
The Bad: The terrible hours, stiff culture, annoying clients
The Ugly: Office politics
Q: What skills have you developed in your role?
RS: Communication and presentation skills, deep industry knowledge (I work in a sector coverage group), knowledge of different financing products (ways to raise funding), financial modeling and valuation techniques
JT: Great excel skills, robot-like attention to detail (spotting formatting errors from a mile away), dealing with different personalities and work styles
Q: What skills do you need to be successful in your role?
RS: Strong work ethic and a good attitude are paramount. You have to have an eagerness to learn, be willing to work hard and also be very organized/able to make deadlines. Effective communication skills and the ability to work in a team are also important. As you become more senior, having good communication/presentation skills is paramount, as it is very much a people to people business
JT: Mental toughness, ability to adapt to different work styles, ability to multi-task (hop from one project to another), getting along well with “important people”, learning quickly and often on your own
Q: What do you enjoy most and least about your job?
RS: I enjoy interacting with everyone in my firm as well as hearing various clients' perspectives. Working at a larger bank, there is an opportunity to learn something new and collaborate with others, including internationally. That being said, being at a larger bank, it is often a time consuming process to get things moving/done, so that is something to work around. There is also constant pressure to be responsive, or "on call" even during your time off
JT: The excel skills that I am gaining along with overall soft skills (dealing with people, higher attention to detail). Part of the job unfortunately does come with dealing with office politics and inefficiencies that are difficult to overcome
We hope this helps you get a better sense of what Investment Banking roles are really like at the junior level!