Investment banking jobs
Here’s a summary of some of the jobs available in investment banking.
Corporate Finance
Think of corporate finance as financial consulting to businesses. Specific activities range from underwriting the sale of equity or debt for a corporate client to providing advice on mergers and acquisitions, foreign exchange, economic and market trends, and specific financial strategies. When most people refer to investment banking, this is what they mean.
CorpFin (as it is known internally) analysts work 80-hour weeks to help prepare (i.e., proofread and Xerox) pitch books to compete against other banks for prospective clients. They run endless financial models and help prepare (again, proofread and Xerox) due diligence on target companies. After 2 or 3 years, they’re off to B-school.
MBAs are brought in at the associate level, where they help underwrite equity (stocks) and fixed-income (bond) offerings, write sections of pitch books, and sit in on client meetings—mostly taking notes—and help devise financial strategies. They also supervise teams of analysts. After 3 or 4 years, they move up to vice president; after another 3 to 5 years, they make it to managing director. Salary range: $100,000 to $170,000, including bonuses, for associates; and $200,000 to $300,000 or more, including bonuses, for VPs.
Sales
Some firms only hire MBAs for sales jobs. Other firms don’t even ask about your education. In either case, the bottom line is how well you can sell the new debt and equity issues CorpFin unloads on your desk—and how quickly you can translate news events or a market shift into transactions for your clients. These jobs are usually much less hierarchical than the banking side. Your sales volume and asset growth are what matter. Salary range: about $40,000, with a $5,000-plus signing bonus for undergrads; MBAs start at $65,000 to $85,000, with a signing bonus. Year-end bonuses fluctuate; if it’s been a good year in the market, they can be as high as 80 to 100 percent of base pay.
Trading
When Hollywood directors want to portray the rough, unruly underside of Wall Street, they wheel the cameras onto a trading floor. This is as close to the money as you can get. Trading also commands respect because it’s tougher, riskier, and more intense than any other job in finance. Traders manage the firm’s risk and make markets by setting the prices—based on supply and demand—for the securities CorpFin has underwritten. Like sales, but more so, you’re tied to your desk and phones while the markets are open—but you get to leave after the closing bell.
Beginners fetch endless takeout food and run other thankless errands; more seasoned traders scream and yell when their markets heat up and do the crossword puzzle the rest of the time. Not for the genteel or the faint of heart. A few traders even grow up to be CEOs. Why? Because they know more about the markets and money than anyone else in banking. Salary range: similar to that in sales.
Research Analyst
Research departments are generally divided into fixed income (debt) and equity. Both do quantitative research (corporate-financing strategies, product development, and pricing models), economic research (forecasts for U.S. and international markets, interest rates, currencies), and individual company coverage. An equity analyst usually focuses on a particular sector—software, oil and gas, or health care, for example.
You move up in this profession by consistently predicting the movement of specific company stocks. The best analysts are ranked annually by Institutional Investor magazine. Their buy, sell, and hold recommendations wield enormous clout, and competition among firms for the top analysts can be intense. Salary range: For the few undergrads and MBAs hired, starting salaries and signing bonuses are often slightly higher than the rest of investment banking. Senior analysts earn six figures and up (way up).
Source: Wetfeet