Investment bankers are financial experts who work with financial institutions (investment banks) to raise capital for organizations, governments and other entities. They assist in making complicated financial transactions that include acquisitions, mergers and sale on behalf of clients. Investment bankers also create detailed documentation needed by the SEC for companies to go public. They issue securities to help companies raise money. Investment bankers also identifies risks associated with projects before their clients invest in them.
There are two paths to becoming an investment banker. You could take Science or Commerce in high school, then pursue a bachelor’s degree in any one of the streams of Finance & Accounting/ Mathematics/ Portfolio Management and Investment Banking/ Security Analysis/ Computer Science/ Physics. On completion of your under graduation, you could take up an internship position in an investment bank or financial institution which would in all likelihood offer you an investment banking job later.
The other path to becoming an investment banker is to pursue a postgraduate course or a postgraduate diploma course after completion of your undergraduate program. You could specialize in areas such as Financial Mathematics/ Financial Planning / Masters in Finance control/ Banking and Finance/ Investment Banking and Equity Research/ Business Economics/ MBA/ Global Investment/ Diploma in Financial Analysis.
In the US, most of the Ivy League universities offer master’s degree programs in Investment Banking. At the undergraduate level, the New York University, The University of Texas at Arlington, University of Houston, Wayne State University -Detroit, St. John's University and the University of North Texas- Dallas, all offer 4-years full-time bachelor’s and master’s degree programs in investment banking.
In the UK, the University of Greenwich has 3 years full-time BSc Hons Finance and Investment Banking course. The University of Reading also offers 3 years full-time BSc Finance and Investment Banking course and the < a href="https://www.univariety.com/college/University-Of-Kent/509be60e">University of Kent has a 4 years Finance and Investment BSc (Hons) course with a year in industry. The University of Brighton, University of South Wales, Birmingham City University and Sheffield Hallam University – all offer BSc. and BA courses in Investment Banking.
In India, Symbiosis Institute of Management-Pune, S.P. Jain Institute of Management & Research- Mumbai, Narsee Monjee Institute of Management Studies-Mumbai, IIM – Kolkata & Ahmedabad, Indian School of Business-Hyderabad, Indian Institute of Banking & Finance (IIBF)-Mumbai, Xavier Institute of Management-Bhubaneswar, and Institute of Chartered Financial Analysts of India University (ICFAI)-Tripura are some of the top institutes that offer bachelor’s, master’s, MBA and diploma programs in Business and Finance courses.
Duration: 6 months to 2 years
Fee per course/annum: ₹ 400,000 - 1,700,000
Although an entry-level investment banker’s profile only requires a bachelor’s degree, many investment bankers pursue an MBA for growth and better future prospects. New hires undergo a great deal of their training (lasting several weeks) through their employers. During this time, they refresh on the principles of accounting, risk management, markets trend & financial statement analysis, and financial modelling. Analysts also learn skills of negotiation and presentation.
Investment bankers work in the advisory capacity for corporations and governments and do not directly deal with individual investors. They arrange equity finances for institutions and organizations, underwrite deals, raise capital for clients through private placements and offer advice on mergers and acquisitions.
The career prospects of an investment banker are directly linked to how the money market is performing. Since the financial markets are doing well now, investment bankers are in demand. And although there are additional jobs in the market, competition is strong. Aspiring investment bankers with postgraduate, MBA or additional certifications will have the best chances of finding employment in this field. Once you have secured employment in an investment banking firm or its likes, you can climb up the hierarchical ladder from an analyst to an associate, to the vice president, a senior vice president and finally the managing director of the firm.
Some of the typical companies where you can work as an investment banker are:
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The best way to get a job as an investment banker after completion of your education is to secure an internship at the desired organization. Investment banks regularly employ undergraduate and graduate interns from top business school and train and mentor them further. Since the interns have a similar job profile as that of an entry-level investment banker which includes data gathering, working with financial models and interacting with clients, the transition from an internship to a full-time employee of the same organization becomes relatively easy. Some of the top investment firms who regularly hire are as follows:
The salary of an investment banker in the US ranges between $7,500 and $25,500 a month including bonuses. In terms of pay, San Francisco, New York and Los Angeles are the best cities to work in the US. In India, the national average salary of an investment banker is Rs.75,250 a month. Mumbai and Bengaluru are the best cities in India for investment bankers.
With the growth in the investment banking space, there is an increased need for skilled professionals in this field. In order to succeed as an investment banker, you must have excellent number-crunching abilities, salesmanship, detailed knowledge of the financial, stocks, bonds, and securities market and quick decision-making ability. Following are some advantages of being an investment banker:.
Belonging to a banking family whose net worth is more the $1 trillion, Nathaniel Rothschild is one of the richest investment bankers in the world with a personal net worth of more than $5 billion. He is currently the chairman of JNR Limited, an investment advisory firm that focuses on the emerging markets in the metals and mining industry.
The founder and CEO of Citadel, a hedge fund company, Ken Griffin manages more than $28 billion in assets for his clients. He started following the financial market from his Harvard dorm room way back in 1987 and became is one of the most dependable investment bankers in the world. His personal net worth is over $8.6 billion.
One of the richest men in Ukraine, Ihor Kolomoyskyi is an investment banker with a net worth of around $1.36 billion. He is the co-founder and Chairman of the Board of Directors of PrivatBank (the largest commercial bank in Ukraine.) He invests and trades in ferroalloys, metal, petroleum industries, oil products, finance and mass media.
1896 - 1926 The golden era of investment banking begins with JP Morgan and National City Bank as the market leaders
1929 - 1970 The period of the Great Depression in America. With the banking system in shambles, 40% of banks either fail or are forced to merge
1970 - 1980 Trading commissions collapse and trading profitability declines/Rise in a number of financial products like derivatives yield high returns for investment banks
1980 - 2007 The IPO boom dominates investment banking
2007 - 2010 The world is faced with the worst financial crisis since the Great Depression
2007 JP Morgan Chase reports record profits of $17.4 billion
2012 The social media giant, Facebook goes public and raises $16 billion
2014 Alibaba, China’s biggest online marketplace raises $22 billion in an IPO