A Career in Investment Banking

Goldman Sachs. J.P.Morgan. Morgan Stanley. Meryl Lynch. Are these the names you dream of having on your business card? Then a career in investment banking is obviously your preferred life path. Investment banks provide financial services related to issuing and purchasing securities at a company or governmental level, manage financial portfolios and assets of individuals and institutions, trade securities, and provide highly specialised investment and financial advice. There are generally three types of investment banks—the large global players, the medium-sized local ones and the regional players. Boutique firms focus on and specialise in a particular industry or type of investment.

Skills and eligibility requirements

A highly analytical bent of mind, quantitative skills, extremely handy interpersonal skills and salesmanship are critical for wannabe investment bankers. It’s a highly competitive and demanding profession and late nights, long hours and erratic schedules are the norm. It’s a high-risk and high-reward profession, so you need to be strong, driven and focused. Surprisingly, it is not mandatory to be a finance graduate to become a successful investment banker. Even lawyers and scientists who have the right skills are happily considered. Investment banks prefer to hire at the entry level and groom you for senior positions.

Most college graduates start as analysts and associates before moving up the ladder. Performance is everything—especially at senior positions, and the only way to stay in the job is to bring in new business, keep your clients happy and close deals quickly. Underperformers and mediocrity are rarely tolerated. The risk exposure increases with seniority but the rewards are exponential too.

Traditionally salaries were very competitive with a huge performance bonus component. However, under the present economic scenario and global financial crises, salaries and bonuses in the industry are under intense scrutiny and layoffs are common. Some reputed firms may offer surprisingly low packages but at the start, focus on the quality of learning over salary. The rich dividends will come later.

A good investment banker is a mix of your own inherent personality, gut feel, ability to understand numbers, spot opportunities in market trends and close deals. Some say the ability to bluff and be ruthless helps. Prepare for an investment banking career by reading books like Liars Poker and The Story of Warren Buffet.

Most investment banks are located in financial capitals like Mumbai, Singapore and New York so be prepared to move where the work is.

Managing egos and teams is as important as managing investment portfolios. Contacts are everything, so build a robust network to get the edge. Each company has its own culture so try and figure out how best to fit in and grow.

With the global financial crises fading from memory and markets bouncing back, it is a good time to kick-start a career in investment banking. There are many options to choose from, so get cracking on your prospect list today!