Getting a job in investment banking is difficult even during a strong economy. Barriers to entry are high. Banks target what they perceive to be the best candidates, recruiting at only the best schools and subjecting wanna-be bankers to the most grueling interview process.
In this economy, getting a job in finance is exceedingly competitive, let alone investment banking. With Street-wide layoffs and bank failures, the supply of labor is unusually high. Competition is fierce, as more candidates compete for a smaller pool of jobs.
What does this mean for you if you are currently seeking a job in FS? Jobs are out there, but they are fewer. However, some banks are seizing this economic downturn as an opportunity to hire good people.
Be ready to knock on what may seem like countless doors to find the right opportunity. Do not be surprised if you meet with firms and they are not quick to proceed with a formal interview process. Many firms are meeting with candidates, but are waiting to see how the economy will play out before making hiring decisions. As you go about your search, be mindful of the following:
Experienced candidates will have an edge in this market. Revisit your cv/resume
and make sure it highlights your experience as well as possible.
Do not limit your interviewing to just a few elite firms. Some midsize firms with little to no exposure to the mortgage markets are hiring.
Know your story cold. It is more important now than ever.
Know your fundamentals cold - accounting, valuation, M&A fundamentals, etc.
Leave no stone unturned. Contact alumni in the industry. Reach out to friends. Personal relationships will help open doors in this market.
Bankingorbust, LLC is here to help you through this tough period. Out team has compiled valuable information to help you find and succeed at a job in investment banking. It's FREE, so take advantage of it!
Friday, 20 February 2009
Investment Banking Basics
The meaning of investment banking is not the financial investment in the banking sector. But in fact, investment banking is a kind of banking function which is used to help clients in creating wealth and funds. The commercial banks use this type of banking in accord with sensible and practical use of the available resources. Not only this, investment banking and people engaged in this sector also provides advice on how to transact in business they are currently in. Through investment banking, companies can create funds in two ways. They can either draw on public funds from capital market by releasing the stock i.e. corporate finance or they can go to venture capitalists or private equities to become share holders in their company. The field of investment banking is also engaged in giving advice and consultation on how to manage various takeovers and merging i.e. [M&A] merger and acquisitions. They also provide companies with ideas on how to declare public offerings and manage their talents. The handling of mergers and acquisitions come under the corporate finance function of the investment banking. The margin between investment banking and other forms of banking has been very unclear for a long time now and for the same time; the function of this banking sector has grown to covering every field of wealth management process of corporate as well as individual persons. Corporate Finance: this is the sector where investment banking works and supports companies the most in getting extra money. Lets take an example that a company needs more money to finance the market research of a product to-be launched to stay forward in competition. Here, investment banking can help you by getting your company’s shares sold and raising funds for you. The other way, how an investment bank can get you money is by trading in stocks on behalf of their clients. [M&A] Merger and Acquisitions: this point doesn’t have any explanation and it can be defined only through an example. Let’s take an example of a company who is going strong in business and market and wish to buy another company just to add more authority to their name and business. Professionals from investment banking sector makes them realize that on merging; both these companies can be a great group and can acquire major part of the market and also the business. They also tell them what are the other benefits of getting merged and also what is the right time according to market conditions for both the companies to get merged into each other.
Investment Banking Offers
As we move further into summer internship season, many have asked me why they can get interviews but can never seem to get actual offers.Usually, they lack a hook. To get an investment banking job, it's not enough to show you can do the job well and have a serious interest in it.You have to show them that they need you more than you need them.Of course, this is never really true. You're just a resource. They're a $100 billion firm. But a hook makes them think differently, at least temporarily.What's A Hook?A hook makes you stand out from everyone else. It can be your extreme enthusiasm over the job that caused you to email them 59 days in a row. It can be the experience you had working at a Chinese Private Equity firm last summer. It might even be how you were a Varsity Athlete in that sport they've never heard of.But it can't be, "I really want to do banking so I can learn!" or, "I like the fast-paced environment!"Those are just standard reasons to say you want to do the job.When bankers interview you, they try to check off 3 boxes - 1) smart 2) can do the job 3) like him. A hook makes sure #3 is a "check."But I'm Just A Normal Person, How Can I Get A Hook?One good tactic is to make a connection with your interviewer by having similar interests, asking questions about some topic he or she likes, or having friends/alumni in common.This requires upfront research and isn't always possible. But when you can do it, it works well.Was your interviewer in the Marines? Maybe your brother/cousin/uncle was too. Was he in the industry where your dad/cousin/uncle works? Same undergraduate schools?No One Wants You Until Someone Wants You (Then Everyone Wants You)Everything is just high school all over again.Another "hook": Convince the firm that you have offers with other investment banks. When they find out others want you, they'll be afraid they're missing something and want you more.The correct answer to, "Are you interviewing with other firms?" is NEVER, "No." Even if you're not, never say, "no." Just be vague and say you are interviewing and considering several options.If you are indeed interviewing successfully with other firms, mention the names - this works especially well if they are competitors. Naming any of the bulge brackets when interviewing with a bulge bracket, for example, would give you a boost.
Career in Investment Banking
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 OptionsInvestment 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.
What is Investment Banking ?
Nature Of Work of Finance Professionals
A career in finance involves a whole range of functions, such as determining the impact of decisions that are made in nearly all functional areas on the financial front. This includes administering portfolios and formulating personal financial plans for investors, supervising banking operations, evaluating and suggesting company's capital budgets and strengthening bank relationships.
Professionals engaged in the finance industry deal with how individuals and institutions handle their financial resources, the methods they use to raise money, its allocation, and how they use it. They also assess the risks these activities involve, and recommend various ways of managing them.
Occupations in Finance
The finance sector has a wide range of occupations to choose from. You can become a portfolio or credit manager, security analyst, opt for the insurance sector, or become a corporate financial officer, financial consultant or lending officer. Below are some of the additional roles that you can pursue:
- Bank Manager- Financial Analyst- Accountant And Auditor- Appraiser and Assessor of Real Estate - Budget Analyst- Claim Adjuster- Examiner- Investigator - Cost Estimator - Tax Examiner- Revenue Agent
Job Opportunities in Finance
The job opportunities in the financial sector are equally vast and varied, a few of which are given here. All of them offer a highly rewarding and satisfying career.
Commercial Banking - The commercial banking sector employs a greater number of finance professionals than any other area of the financial services industry. Jobs in the banking industry have a direct client interface with people from all sections of the society, which offers opportunities for clientele development. The starting point would be as tellers, after which people shift to other areas of banking services like credit card banking, trade credit, leasing and international finance.
Corporate Finance - This would involve employment in a corporation, generally as a finance officer. The main job responsibilities would entail securing financial resources for developing the business of the company. The money can be utilized to make acquisitions to expand the company and secure its future.
Financial Planning Consultancy - You may set up a financial planning consultancy of your own or seek employment in an existing one. This work involves helping individuals in planning their finances for their children's education, or their retirement needs. It requires answering questions and educating clients about risk factors, to help them to invest their money wisely. Being employed in a corporate setting is also an option, with a job profile related to future financial planning. It would require a firm understanding of investments, estate and tax planning.
Investment Banking - Investment banking pertains to helping investors in buying, trading and managing financial assets. This field offers opportunities to work in world-renowned investment banks like Salomon Smith Barney, Goldman Sachs and Merrill Lynch.
Insurance - The insurance industry has achieved revenues of over trillion dollars. It is one field that has tremendous scope of absorbing finance professionals. The work is mainly about managing risks and identifying problem areas. According to estimates, it employed nearly two and a half million people in the U.S. in the year 2005. One could work as an underwriter, customer service representative, actuary or an asset manager, in this sector.
A career in finance can be pursued in a wide variety of fields. The financial sector offers opportunities that are intellectually and financially rewarding
A career in finance involves a whole range of functions, such as determining the impact of decisions that are made in nearly all functional areas on the financial front. This includes administering portfolios and formulating personal financial plans for investors, supervising banking operations, evaluating and suggesting company's capital budgets and strengthening bank relationships.
Professionals engaged in the finance industry deal with how individuals and institutions handle their financial resources, the methods they use to raise money, its allocation, and how they use it. They also assess the risks these activities involve, and recommend various ways of managing them.
Occupations in Finance
The finance sector has a wide range of occupations to choose from. You can become a portfolio or credit manager, security analyst, opt for the insurance sector, or become a corporate financial officer, financial consultant or lending officer. Below are some of the additional roles that you can pursue:
- Bank Manager- Financial Analyst- Accountant And Auditor- Appraiser and Assessor of Real Estate - Budget Analyst- Claim Adjuster- Examiner- Investigator - Cost Estimator - Tax Examiner- Revenue Agent
Job Opportunities in Finance
The job opportunities in the financial sector are equally vast and varied, a few of which are given here. All of them offer a highly rewarding and satisfying career.
Commercial Banking - The commercial banking sector employs a greater number of finance professionals than any other area of the financial services industry. Jobs in the banking industry have a direct client interface with people from all sections of the society, which offers opportunities for clientele development. The starting point would be as tellers, after which people shift to other areas of banking services like credit card banking, trade credit, leasing and international finance.
Corporate Finance - This would involve employment in a corporation, generally as a finance officer. The main job responsibilities would entail securing financial resources for developing the business of the company. The money can be utilized to make acquisitions to expand the company and secure its future.
Financial Planning Consultancy - You may set up a financial planning consultancy of your own or seek employment in an existing one. This work involves helping individuals in planning their finances for their children's education, or their retirement needs. It requires answering questions and educating clients about risk factors, to help them to invest their money wisely. Being employed in a corporate setting is also an option, with a job profile related to future financial planning. It would require a firm understanding of investments, estate and tax planning.
Investment Banking - Investment banking pertains to helping investors in buying, trading and managing financial assets. This field offers opportunities to work in world-renowned investment banks like Salomon Smith Barney, Goldman Sachs and Merrill Lynch.
Insurance - The insurance industry has achieved revenues of over trillion dollars. It is one field that has tremendous scope of absorbing finance professionals. The work is mainly about managing risks and identifying problem areas. According to estimates, it employed nearly two and a half million people in the U.S. in the year 2005. One could work as an underwriter, customer service representative, actuary or an asset manager, in this sector.
A career in finance can be pursued in a wide variety of fields. The financial sector offers opportunities that are intellectually and financially rewarding
Careers in Finance
Nature Of Work of Finance Professionals
A career in finance involves a whole range of functions, such as determining the impact of decisions that are made in nearly all functional areas on the financial front. This includes administering portfolios and formulating personal financial plans for investors, supervising banking operations, evaluating and suggesting company's capital budgets and strengthening bank relationships.
Professionals engaged in the finance industry deal with how individuals and institutions handle their financial resources, the methods they use to raise money, its allocation, and how they use it. They also assess the risks these activities involve, and recommend various ways of managing them.
Occupations in Finance
The finance sector has a wide range of occupations to choose from. You can become a portfolio or credit manager, security analyst, opt for the insurance sector, or become a corporate financial officer, financial consultant or lending officer. Below are some of the additional roles that you can pursue:
- Bank Manager- Financial Analyst- Accountant And Auditor- Appraiser and Assessor of Real Estate - Budget Analyst- Claim Adjuster- Examiner- Investigator - Cost Estimator - Tax Examiner- Revenue Agent
Job Opportunities in Finance
The job opportunities in the financial sector are equally vast and varied, a few of which are given here. All of them offer a highly rewarding and satisfying career.
Commercial Banking - The commercial banking sector employs a greater number of finance professionals than any other area of the financial services industry. Jobs in the banking industry have a direct client interface with people from all sections of the society, which offers opportunities for clientele development. The starting point would be as tellers, after which people shift to other areas of banking services like credit card banking, trade credit, leasing and international finance.
Corporate Finance - This would involve employment in a corporation, generally as a finance officer. The main job responsibilities would entail securing financial resources for developing the business of the company. The money can be utilized to make acquisitions to expand the company and secure its future.
Financial Planning Consultancy - You may set up a financial planning consultancy of your own or seek employment in an existing one. This work involves helping individuals in planning their finances for their children's education, or their retirement needs. It requires answering questions and educating clients about risk factors, to help them to invest their money wisely. Being employed in a corporate setting is also an option, with a job profile related to future financial planning. It would require a firm understanding of investments, estate and tax planning.
Investment Banking - Investment banking pertains to helping investors in buying, trading and managing financial assets. This field offers opportunities to work in world-renowned investment banks like Salomon Smith Barney, Goldman Sachs and Merrill Lynch.
Insurance - The insurance industry has achieved revenues of over trillion dollars. It is one field that has tremendous scope of absorbing finance professionals. The work is mainly about managing risks and identifying problem areas. According to estimates, it employed nearly two and a half million people in the U.S. in the year 2005. One could work as an underwriter, customer service representative, actuary or an asset manager, in this sector.
A career in finance can be pursued in a wide variety of fields. The financial sector offers opportunities that are intellectually and financially rewarding
A career in finance involves a whole range of functions, such as determining the impact of decisions that are made in nearly all functional areas on the financial front. This includes administering portfolios and formulating personal financial plans for investors, supervising banking operations, evaluating and suggesting company's capital budgets and strengthening bank relationships.
Professionals engaged in the finance industry deal with how individuals and institutions handle their financial resources, the methods they use to raise money, its allocation, and how they use it. They also assess the risks these activities involve, and recommend various ways of managing them.
Occupations in Finance
The finance sector has a wide range of occupations to choose from. You can become a portfolio or credit manager, security analyst, opt for the insurance sector, or become a corporate financial officer, financial consultant or lending officer. Below are some of the additional roles that you can pursue:
- Bank Manager- Financial Analyst- Accountant And Auditor- Appraiser and Assessor of Real Estate - Budget Analyst- Claim Adjuster- Examiner- Investigator - Cost Estimator - Tax Examiner- Revenue Agent
Job Opportunities in Finance
The job opportunities in the financial sector are equally vast and varied, a few of which are given here. All of them offer a highly rewarding and satisfying career.
Commercial Banking - The commercial banking sector employs a greater number of finance professionals than any other area of the financial services industry. Jobs in the banking industry have a direct client interface with people from all sections of the society, which offers opportunities for clientele development. The starting point would be as tellers, after which people shift to other areas of banking services like credit card banking, trade credit, leasing and international finance.
Corporate Finance - This would involve employment in a corporation, generally as a finance officer. The main job responsibilities would entail securing financial resources for developing the business of the company. The money can be utilized to make acquisitions to expand the company and secure its future.
Financial Planning Consultancy - You may set up a financial planning consultancy of your own or seek employment in an existing one. This work involves helping individuals in planning their finances for their children's education, or their retirement needs. It requires answering questions and educating clients about risk factors, to help them to invest their money wisely. Being employed in a corporate setting is also an option, with a job profile related to future financial planning. It would require a firm understanding of investments, estate and tax planning.
Investment Banking - Investment banking pertains to helping investors in buying, trading and managing financial assets. This field offers opportunities to work in world-renowned investment banks like Salomon Smith Barney, Goldman Sachs and Merrill Lynch.
Insurance - The insurance industry has achieved revenues of over trillion dollars. It is one field that has tremendous scope of absorbing finance professionals. The work is mainly about managing risks and identifying problem areas. According to estimates, it employed nearly two and a half million people in the U.S. in the year 2005. One could work as an underwriter, customer service representative, actuary or an asset manager, in this sector.
A career in finance can be pursued in a wide variety of fields. The financial sector offers opportunities that are intellectually and financially rewarding
The big investment banks
Most investors feel at some point during their investment career that the large institutional investors somehow have an upper hand or an advantage when it comes to investing in the financial markets. While this used to be the case the Internet and software developments have began to erode these advantages and allow individual investors to play on a level playing field with the professionals.
My experience in investment banking
Having been both a private individual investor as well as working in one of the worlds largest Investment Banks I have seen both sides of the proverbial fence.
Traditionally one of the main advantages Investment Banks have had is their experience. Even as traders retire, leave or get fired they always leave behind a trail of knowledge and experience that the business managers learn from and use to decide future trading or investment decisions. As an individual investor you can sometimes feel that you are so inexperienced in a particular investment type that it is too risky to proceed and invest. This effect can be described as a barrier to entry. Individual investors need a certain amount of knowledge of a market to be able to enter and trade.
Another area where the banks have an advantage is manpower. Traditionally traders in banks had an army of research analysts that will process and analyze huge amounts of market and company data in order to find profitable trades. In more recent years traders at financial institutions have increased this advantage by automating their research and stock picking using computers
My experience in investment banking
Having been both a private individual investor as well as working in one of the worlds largest Investment Banks I have seen both sides of the proverbial fence.
Traditionally one of the main advantages Investment Banks have had is their experience. Even as traders retire, leave or get fired they always leave behind a trail of knowledge and experience that the business managers learn from and use to decide future trading or investment decisions. As an individual investor you can sometimes feel that you are so inexperienced in a particular investment type that it is too risky to proceed and invest. This effect can be described as a barrier to entry. Individual investors need a certain amount of knowledge of a market to be able to enter and trade.
Another area where the banks have an advantage is manpower. Traditionally traders in banks had an army of research analysts that will process and analyze huge amounts of market and company data in order to find profitable trades. In more recent years traders at financial institutions have increased this advantage by automating their research and stock picking using computers
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