To succeed as a corporate investment banker, you'll need a keen financial mind and an understanding of how money is made and invested
As a corporate investment banker, you'll provide a range of financial services to companies, institutions and governments. You'll manage corporate, strategic and financial opportunities, including:
- bonds and shares
- initial public offerings (IPO).
You may also advise and lead management buyouts, raise capital, provide strategic advice to clients and identify and secure new deals.
Types of corporate investment banker
Many investment banks deal in three main areas:
- corporate finance - involves providing specialist knowledge and advice on mergers and acquisitions, assisting clients with expansion to increase profitability, safeguard market position, diversify and so on. You could manage the transaction process, assessing the target organisation and the impact of the deal. This involves knowledge of legal and regulatory issues, in addition to sound financial knowledge and an in-depth understanding of the client's industry.
- debt capital markets - this involves working with lenders such as financial institutions, agencies and public and private companies in order to design and restructure debt obligations.
- equity capital markets - involves advising clients on how much capital to raise, from where and when, through research and analysis of products and markets.
The main role of a corporate investment banker is to advise companies, institutions and governments on how to achieve their financial goals and implement long and short-term financial plans.
You will work in dedicated teams, focusing on specific transactions or market sectors. Corporate investment bankers also work alongside other related professionals such as lawyers and accountants. A typical corporate finance deal involves two stages:
- origination - assessing a deal's desirability, which is sometimes an innovative idea from the bank rather than the client. Financial models are used to simulate possible outcomes. This requires a deep understanding of a sector.
- execution - structuring and negotiating the detailed terms of a deal, often in liaison with other professionals.
Although dealing with different, specific business areas, project teams liaise with one another during the two phases of a deal in order to obtain relevant specialist information and market intelligence.
Typical activities include:
- thoroughly researching market conditions and developments
- identifying new business opportunities
- carrying out financial modelling, then developing and presenting appropriate financial solutions to clients
- liaising with the chief executive and chief finance officers of large organisations
- co-ordinating teams of professionals, including accountants, lawyers and PR consultants and working closely with them.
- Average starting salaries for corporate investment bankers are around £30,000 to £40,000.
- After three or more years, this rises to up to £50,000.
- Those with significant experience may earn a base salary of around £150,000.
Pay is often performance related, and bonuses can sometimes be four or more times higher than your base salary. The environment is strongly meritocratic. Some employers offer welcome bonuses in the region of £2,000 to £5,000.
Income figures are intended as a guide only.
Hours are regularly long and often unsocial. You'll be expected to work at the weekend as deals approach crucial stages - fifteen hour days are not unusual, and you could work up to 100 hours a week in busy periods.
What to expect
- Investment banks are increasingly keen to attract a diverse workforce. Most have internal support networks for under-represented groups. A number of banks are members of the Stonewall Diversity Champions programme.
- The working environment can be extremely stressful as high expectations for targets are set. The industry is also strongly connected to the economy, so job availability and the amount of job losses fluctuates depending on how healthy the economy is.
- The main financial centres are New York and London, followed by major European cities such as Frankfurt and Paris. UK-based positions are almost exclusively in London.
- Many investment banks have global offices and can offer you the chance to work overseas within the first two years. Once qualified, you may spend a significant amount of time working abroad.
Investment banks are interested in graduates from all disciplines, not just those with finance-related degrees.
Standards are high and companies usually ask for at least a 2:1 degree with a strong, consistent, academic performance. They often specify a minimum number of UCAS points.
Entry without a degree is not usually possible.
You'll need to show:
- proven strong numerical and analytical skills
- excellent team work and team leadership skills
- communication and interpersonal skills
- project and time management ability
- dedication, energy and commitment
- self-confidence and the ability to make difficult decisions
- the ability to work under pressure and cope well in stressful situations.
Employers look for commercial awareness and knowledge of financial markets. A second language may be useful, but is not essential.
Gaining work experience in the industry is crucial. Completing an internship with an investment bank is a valuable way to improve your chances of securing a job. Most investment banks offer some of their interns full-time positions. The application process is similar to that of graduate schemes. Internships are normally open to penultimate-year students.
Experience gained in back-office functions within an investment bank demonstrates a long-term commitment to working within the industry.
Part-time work or holiday work at your chosen organisation can also be very valuable, especially at the selection stage when employers are looking for ways to differentiate between the candidates.
Within London, investment banks are split into three main categories:
- international investment banks, such as Goldman Sachs and Morgan Stanley
- investment banking departments of large commercial banks, such as Deutsche Bank, Citigroup, Barclays, Credit Suisse and UBS
- specialist independent investment banks, such as Lazard and Rothschild, Jefferies and Greenhill.
When you're choosing which banks to apply to, consider the size of the organisation. Joining a larger bank will naturally lead to working on much larger accounts but career progression may be more rapid in a smaller company.
It's also worth looking at the bank's reputation. Some companies are strong in mergers and acquisitions, while others are renowned for their work in debt capital.
Other employers offering relevant experience include:
- Financial Conduct Authority (FCA)
- London Stock Exchange (LSE)
- The Bank of England
- investment firms
- venture capital firms.
Look for job vacancies at:
You can also look to companies' own websites and graduate brochures for opportunities, or in the financial job pages of the broadsheets such as:
- Times Online
- Financial Times
- supplements of the national press, e.g. The Guardian's graduate section on Saturdays.
There are some specialist recruitment agencies that deal with investment banking opportunities, such as City Jobs.
The recruitment process is lengthy, normally split into the following stages:
- an online application form
- numerical and verbal reasoning tests
- first interview/assessment centre
- final interviews.
Competition for positions is fierce, so preparation and planning are essential to succeed.
Some investment banks accept applications from students who require a work permit. You should check with the individual organisation.
Many of the investment banks have a strong presence on university campuses, posting vacancies through careers service bulletins and websites, holding presentations and attending recruitment fairs. You can find details and dates on company and careers service websites.
Some organisations expect candidates to find out about them and research the opportunities available and as such do not advertise heavily.
New trainees must complete FCA training and exams, as this is required of anyone working in investment banking in the UK.
As a new trainee, you'll be introduced to the sector via intensive company induction programmes, which may last four to eight weeks. These programmes are delivered by senior professionals from within the company and industry experts.
They're designed to provide a comprehensive overview of the sector, covering areas such as:
- capital markets
- corporate finance
- financial modelling.
Induction programmes may bring together new trainees from across the organisation. The focus is on team building and case-study-based learning. You should expect the training to be rigorous, challenging and comprehensive.
Once inductions are completed, additional training may be provided through in-house courses and seminars, and working alongside those already established in the role.
Some employers may also require further professional qualifications. The Chartered Institute for Securities & Investment (CISI) provides a number of qualifications related to the work of investment bankers, which are approved by the FSA.
Corporate investment bankers successfully completing this certificate may then opt to continue their professional development by studying for the Corporate Finance Qualification. This is a global qualification provided by the Institute of Chartered Accountants in England and Wales (ICAEW) Careers.
Training courses are also provided by:
- Chartered Financial Analyst (CFA) Society of the UK (CFA UK)
- The Association of Corporate Treasurers (ACT)
- The London Institute of Banking & Finance
Your employing organisation will be able to advise on the studies that will best suit your particular career goals, with many running in-house programmes for continuing professional development (CPD).
Most graduates begin their careers in analyst roles. These are two to three year trainee positions - on completion you'll progress to associate level, although candidates with a Master of Business Administration (MBA) may be granted direct entry. Associates typically have a team of analysts working for them.
After a further three years, you may move to vice president (VP), managing the day-to-day work of both associates and analysts. VPs are in more frequent contact with clients and may have their own customers.
The next step is director or executive director and then managing director, although promotion beyond VP is difficult. Exceptional individuals may achieve this within ten years of graduating.
Although responsibility increases with seniority, analysts are still put on a steep learning curve and, in order to progress, they are expected to demonstrate more than just analytical skills.
Additional competencies include:
- strong leadership potential
- sophistication of judgment
- an understanding of client motivation and industry as well as expertise in the commercial context of their work.
Being proactive and gaining experience in as many areas as possible from an early stage demonstrates commitment and a desire to move upwards.
Performing well not only leads to good bonuses and internal recognition, but attracts outside attention. Headhunting is common within the sector. High performers are in demand and it's not unusual for individuals or whole teams to be poached by other banks.
Headhunting aside, regular moves between banks are possible. Experienced investment bankers may also move into senior management positions in industry, commerce or government.
It's also possible to enter investment banking after training as an accountant or lawyer. Specialist industry knowledge is highly valued, as is a range of talents, including quantitative skills and general financial knowledge.