Corporate investment banking is a competitive industry and having relevant work experience is crucial for breaking into the career
As a corporate investment banker, you'll provide a range of financial services to companies, institutions and governments with the aim of helping them to achieve their financial goals and implement long and short-term financial plans.
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.
You'll 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.
Types of corporate investment banker
Many investment banks deal in three main areas:
- corporate finance - involves providing specialist knowledge and advice on areas such as mergers and acquisitions, expansion to increase profitability, safeguarding market position and diversifying. 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 - 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.
As a corporate investment banker you’ll need to:
- assess a deal’s desirability, using financial models to simulate possible outcomes, which requires a deep understanding of a sector
- structure and negotiate the detailed terms of a deal, often in liaison with other professionals
- liaise with project teams in a deal to obtain relevant specialist information and market intelligence
- thoroughly research market conditions and developments
- identify new business opportunities
- carry out financial modelling, then develop and present appropriate financial solutions to clients
- analyse detailed numerical information and interpret findings for clients
- liaise with the chief executive and chief finance officers of large organisations
- co-ordinate teams of professionals, including accountants, lawyers and PR consultants and work closely with them.
- Average starting salaries for corporate investment bankers are around £30,000 to £40,000. In the larger banks this may be more.
- After three or more years, this rises to between £50,000 and £70,000.
- Those with significant experience may earn a base salary of £150,000 to £165,000.
The base salary only forms part of the compensation package with bonuses being standard practice that can in some cases double or triple the 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 within corporate investment banking are well known for being regularly long and often unsocial. Typically, you may work up to 65-70 hours a week but when a deal is closing the workload becomes more intense and you may need to work up to 100 hours that particular week.
Hours tend to be longer at the more junior levels and working time may balance out more once you reach vice president level.
What to expect
- The working environment can be extremely stressful as high expectations for targets are set. Workloads and hours can be intense so you should be prepared for this and have ways to help manage stress levels.
- The industry is strongly connected to the economy, so job availability and the amount of job losses fluctuates depending on how healthy the economy is.
- 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 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.
Corporate investment banking is a graduate career. Standards are high and companies usually ask for at least a 2:1 degree with a strong, consistent, academic performance.
Graduates from all disciplines are considered but degrees that may be particularly useful include:
- accounting and finance
- business management
- international business
Many investment banks have international offices and so language qualifications may also be helpful.
Postgraduate qualifications are not essential but a relevant subject such as a Master of Business Administration (MBA) may be useful to set you apart from others in this competitive industry. However, it will not guarantee you a position so consider your options carefully.
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, ambition, energy and commitment
- self-confidence and the ability to make difficult decisions
- problem-solving skills and adaptability
- the ability to work under pressure and cope well in stressful situations.
Employers look for commercial awareness and knowledge of financial markets.
Gaining work experience in the industry is crucial. Investment banks offer summer internships that typically last 10 to 12 weeks. This is something you should aim to secure in your penultimate year so you should apply in plenty of time and should expect to make several applications before you're successful.
Summer internship programmes tend to be offered at an analyst level for those in their penultimate year of an undergraduate degree or at associate level for those studying a postgraduate degree such as an MBA. In some cases the internship can lead to an offer of full-time, permanent employment.
Some firms also offer shorter internships available in the spring, which you can usually apply for when you’re in the first year of your degree. Check the websites of the investment banks you're interested in for further details.
Experience gained in back-office functions within an investment bank is useful as it demonstrates a long-term commitment to working within the industry.
Part-time work or holiday work at your chosen organisation in any role can also be very valuable, especially at the selection stage when employers are looking for ways to differentiate between the candidates.
Find out more about the different kinds of work experience and internships that are available.
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 so you can match this to your interests.
Other employers 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 on individual company websites for opportunities. There are some specialist recruitment agencies that deal with investment banking opportunities.
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.
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.
As a new trainee, you'll be introduced to the sector via intensive company induction programmes, which 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. 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. See CISI Qualifications for more details.
Once you have worked within corporate investment for at least five years, and if you’ve reached a senior position, you are able to study for the Corporate Finance Qualification. This is a global qualification provided by the Institute of Chartered Accountants in England and Wales (ICAEW).
Training courses are also provided by:
- Chartered Financial Analyst (CFA) Society 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 and on completion you'll progress to associate level. If you have a Master of Business Administration (MBA) it may be possible to enter directly into the associate role. Associates typically have a team of analysts working for them.
After a further three years, you may gain promotion to vice president (VP), managing the day-to-day work of both associates and analysts. As a VP you’ll be in more frequent contact with clients and may have your 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.