Banking is not about deposits and lending anymore, when it goes beyond retail customers. Clients require an expert assistance in managing funds, making the right investment choice and carrying out mergers and acquisitions. The scope of investment banking is immense and you need to have excellent people skills along with a sound understanding of finance.
If you look at Investment banks there are broadly two types of bank. Though the segregation is not official it will give a fair idea about the nature of business.
Segregation of Investment Banks
The world leaders in terms of reach and volume of operation comes under bulge bracket investment bank. These banks are global players that cater to most if not all industrial segment. Banks like Goldman Sachs, UBS, Citigroup, and Morgan Stanley are some examples of bulge bracket banks that provide every investment or almost all of it under a single roof.
A boutique bank on the other hand caters either particular industry or service. Lazard and Gleacher; for example specialize in restructuring, Mergers and Acquisitions. These boutique banks dedicated to a particular service or product. Some of the boutique banks like Allen & Co. and Cowen & Co. deal with a particular industry like media and healthcare respectively.
Career Path of an Investment Banker
There is a definite career path if you are looking at a career in this field. The stepping stone towards becoming an investment banking professional starts just after you graduate as an Analyst. Ideally you need to complete two years as an analyst to take a leap to become Investment Banking Associate.
The job of an analyst in investment banking revolves around preparing presentations, analyzing historical data and dealing with administrative task. An associate apart from these works as a mediator between senior and junior bankers. It takes an average of three and half years to get promoted as a Vice President, wherein you understand backgrounds, future prospect and customize investment plan, oversee mergers and acquisition, help companies deal with equity and debt fund to raise capital and many more tasks.
Moving forward, you can become a Director and Managing Director, which are the executive roles. To be an investment banking professional you need a sound finance background, an analytical mindset to tap even the minutest detail, ability to see the bigger picture based on recent trends, a deep market knowledge and excellent people skill.
The Scope of Job
As your career in investment banking you will need to take care of various functions. You act as an advisor and at times a mentor to oversee a broad spectrum of investment requirements:
As a part of Corporate Finance you mentor organizations to raise capitals for their new and on-going ventures. Fund raising can be through asset backing, equity and debt fund or through other funding avenues you deem suitable.
Merger and Acquisitions can be tricky and as an Investment Banker, one of your major concern areas is a smooth process where one company acquires another or merges into another.
It involves a lot of research and an updated hands on knowledge about the market worldwide. You oversee the emerging market where companies can float security, advise them regarding buying and selling funds and further on.
Importance of Certification in Investment Banking
While an MBA in finance gives you a broad specialization, you need a focused certification for Investment Banking. IBCA comes with Certified Investment Banking Professional that helps Business Degree graduates the right head start as an investment Banker. For Professionals who want to further their career as investment banking professional or want to make a transition from Finance, Senior Investment Banking Professional Certificate is the right pick.
A career as an Investment Banker can be lucrative as well as enriching. The entry level analyst job has a compensation range of $ 100,000 to $150,000 and this is exclusive of the bonus. A certification adds to your expertise to enable a quick scaling up the ladder.