Investment bankers earn one of the most alluring packages among all professionals. If you look at the current economy, one will realize that investment bankers will never run out of jobs. Investment banking is a field where one can live their dreams. To keep the economy moving forward, one will need the help of investment bankers.
One can think of the country’s equity as a single company that deals with selling shares. And these equity shares can be of several forms. Although there has been slow progress in the production of shares in many product areas, as a result it gets declined owing to stock buybacks. But at the same time, it is seen that the demand for the shares has risen drastically, thus, there is a hypothetical believe that when prices of any product rises because the demand outstrips the supply, it is seen that the producer of the product is bound to increase the supply.
What is investment banking?
It is a specific corporate division of banking that helps create capital for governments, other companies and many more entities. Investment bank also acts as an intermediary between people who have money to invest and corporations that need capital for the growth of their businesses. As a full-service investment bank, one can avail wide range of services including sales and trading, asset management, commercial banking, retail banking, underwriting, and M&A.
Skills required for an investment banking career:
Being acertified investment banker, one would require to work with financial modeling and valuation, be it for mergers or acquisition activities or for analysts and associates working in banks who spend much of their time working with excel. They are required to build financial models that needs a lot of valuation methods to be used that will help advise clients with a complete deal.
An investment banking career is by far one of the most sought after job roles by professionals from the finance background. If you’re desperately looking to earn good money and have the required skills, then this job role might be just the suitable career starter for you.
- Business valuation – one must be well acquainted with wide range of valuation methods like precedent transactions, comparable company analysis and DCF analysis.
- Financial modeling – an investment banker must be able to perform financial activities such as discounted cashflow models (DCF), LBO models, building 3-statement models etc.
- Preparation of transaction documents – preparation of transaction documents such as investment teaser, term sheet, confidentiality agreement, building data room, and confidential memorandum (CIM) is a must for the candidate.
- Negotiation –it is one of the major factors in the negotiating tactics between the buyers and the sellers in the transaction methods and that helps clients maximize value creation.
- Sales and business development – one will need to meet existing clients constantly to pitch in their ideas or offer the support for the work that they do or provide value-added advice that will help buy new businesses.
Prestigious investment banks generally prefer candidates with strong influence in their education background. Coursework and investment banking certification is highly recommended in topics related to finance, economics and mathematics.
It is important for the candidate to have solid understanding of accounting fundamentals and then take up credible certification programs under your belt. Taking up certifications can be proven invaluable for a candidate looking to start their career in investment banking.