What is Investment Banking?
A full service investment bank offers a range of financial services that includes Sales and Trading, Investment Management, Research and Risk Management in addition to the core services (or products) of an Investment Banking Division described here.
An investment bank provides advice on raising funds, mergers and acquisitions (M&A), restructurings, lending, privatizations, treasury services, risk management solutions and initial public offerings. Raising funds include advising on both the debt and equity capital markets while M&A work includes mergers, acquisitions and sales.
An Investment Banking Division will often have specialist, regional and industry vertical groups. Specialist groups could include dedicated teams in Mergers and Acquisitions, Financial Sponsors, Leveraged Finance, etc. Industry vertical groups could include: Aerospace, Agriculture (could include sustainability), Airlines, Apparel, Automotive, Biotechnology, Chemicals, Computers, Consumer Goods, Defense (perhaps part of Public Sector), Education, Energy, Financial Services, Government (perhaps part of Public Sector), Health Care, High Technology, Insurance, Legal, Manufacturing, Media & Entertainment, Medical Devices, Nonprofit, Pharmaceuticals, Publishing, Real Estate, Retail/Wholesale, Software, Technology, Telecommunications, Transportation, etc.
What are common post-MBA Investment Banking positions?
Investment banking positions are very structured with pre-MBA positions usually called Analysts and post-MBA positions usually called Associates. Over an approximate 3-4 year period, you can expect exposure to many different transaction types, regions and industry verticals. Associates oversee Analyst’s work output, perform some of the discounted cash flow and valuation financial modeling, create some of the presentations, conduct and prepare due diligence and have significant engagement with clients and other investment banks depending on the transaction type. Vice President is the role following Associate.
The summer internship is key for Investment Banking as it is for other fields, such as Investment Management and Management Consulting. Investment banks hire for Summer Associate Intern positions too and make full-time offers to select Summer Associates that usually include second year tuition.
How should applicants with post-MBA Investment Banking goals target business schools?
If you have post-MBA investment banking goals, choosing an MBA school at which investment banking firms recruit for Associate positions should be one of your business school selection criteria. Often this information is not published, but you can look at the percentage of graduates (and summer interns) entering investment banking on MBA career employment reports. Schools will publish those firms that hire students and often times schools will report those firms that recruit on campus.