INVESTMENT BANKING - A SNICK PREVIEW!

Investment banking is field of banking which offers various services to the companies. These activities include sale and purchase of shares for their clients as well as provision of financial guidance to investors. They also represent their clients in mergers and acquisitions and in initial public offers (IPOs).

Investment banks engage in various activities in pursuit of their goals. However, the businesses carried out by most large investment firms include:

1.       Sales and trading business managed by the Trading Division, which provides investing, intermediating, and risk-management services to institutional investor clients, performs research, and also participates in nonclient-related investing activities;

2.      Investment banking business managed by the Investment Banking Division, which focuses on capital raising and M&A transactions for corporate clients and capital raising for government clients;

3.      Asset management business managed by the Asset Management Division, which is responsible for managing money for individual and institutional investing clients.

For one to qualify to practice as an investment banker, some skills are relevant as without them the job would prove mind bogging and impossible. The skills include:

Key Skill Area                                      Requirement

People skills:                                           High

Sales skills:                                              Medium

Communication skills:                         High

Analytical skills:                                    High

Ability to synthesize:                            High

Creative ability:                                    High

Initiative:                                                Medium

Work hours:                                           50-120/week

In addition to the above skills, one must have a bachelor’s degree program in business, accounting or finance. These programs take four years to complete and are available at colleges and universities.

Through this type of program, aspiring investment bankers land entry-level positions as financial analysts. The level is being an associate, which calls for the same skills but in larger volumes. It also calls for more advanced qualifications academically such as an MBA majoring in finance or economics, CFA – (Chartered Financial Analyst) or even CMA – (Certified Management Accountant).

Investment banking is a high work, high risk, and high reward profession. When you start your hours will typically be long but the work can be exciting. Be prepared for moments of frustration where you are stretched too thin and moments of exhilaration where everything clicks.


Biz quote: An investment banker's work is dictated by the different financial needs of clients. (© Jose Luis Pelaez, Inc./Corbis.)