Investment Banking

Investment Banking questions and answers

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Q: Investment Banking?
I found a definition on wetfeet about investment banking. What I-Banking Is "It is an umbrella term for a range of activities: underwriting, selling, and trading securities (stocks and bonds); providing financial advisory services, such as mergers and acquisition advice; and managing assets" I thought managing assets belongs to investment management. Am I just confused between i-banking and the i-banking division (IBD)?

A: I think it is a poorly worded definition. I would say that i-banking is mostly about the process of bringing securities to the market and advising clients on various business matters, such as M&A. I think the managing assets they are talking about is in reference to advisory work with the companies in helping them manage their assets, not portfolio management from a mutual fund or hedge fund perspective.

Q: How do I find an Investment Banking job without prior experience?
I am currently working for a big CPA firm. I have two years of experiences. I am looking to make a switch to Financing, particular Investment Banking. I have been searching for an associate position at many of the IB firms, but all of them seem to require an MBA or IB experience. Due to this reason I am planning to apply to business school. Is it possible for me to find a IB or equity research job without prior experiences or an MBA? If so, how?

A: In today's America fat chance. I know people with MBAs from decent schools working as tellers. The late-90s are no more.

Q: What are different fields of Investment Banking, and what is usually involved at the associate level?
I'm interested in the field, but don't have much experience. I'm interested in Global Markets and would like to get some general information about this field and investment banking in general.

A: ther's really only 3 levels; The Rich Guys, the Stiffs, and The Slaves. As an entry level dude, you'lll be A Slave. The hours are brutal, and 80% of the slaves get washed out, burned out, or fired. But if you're one of the 20%, then you'll be A Stiff. The Stiff usually is a guy in his 30's, he works alot, but the cash starts to tumble in. And you'll have your're own stable of slaves. 80% of the stiffs either get washed out, burned out, or fired. Now, if your still with me here, you're a Rich Guy. Rich guys become obscenly rich, and they live a very good like, until the keil over from a heart attack, generally around 52.

Q: What is investment banking? Can you please suggest a good book on it for a layman to understand the banking ? ?
I am looking for a good book on international banking in general and investment baking in specific. Please advise which book will give me an easy understanding of the subject.

A: INVESTMENT BANKS are BANKS which take care of the INVESTMENTS of the public and the corporates. They are just like our Commercial Banks who Borrow and Lend. But Investment Banks INVEST in risky ventures (Venture Capitalists), Borrow (accept deposits) from general public/corporates. Investments Banks lend to seed capitalists and budding enterpreneurs based on the nature of busiess they undertake. They also invest funds (deposits) HIGHLY PROFITABLE SECURITIES. But as it is said, where returns are high, RISK is equally high. There are many good books available on Investment Banking. Here are a few u may try: An Odyssey in High Finance - By Alan MooreHead Investment Banking - By Subramanyam Business of Investment Banking - K Thomas Liaw Good Luck!

Q: What are the different phases in the investment banking process?
One of my friends told me that his company is currently in "Phase C" in the investment banking process. I've never heard of the term "Phase C". I was just wondering was it something that he made up to make me feel ignorant or was it something that I'm actually not familiar with?

A: I never heard of that either! He may be in what they call phase C in their training of him! I was an investment banker and registered principal for many a year

Q: What are the different job positions in investment banking?
I am very interested in entering the investment banking field, and would like to know the different types of positions available.

A: Investment banking is just that... investment banking. There are different groups within IB, but not really different positions (unless you're talking about hierarchy, which is dictated strictly be seniority). Each group will give you a different concentration. You can enter either in a industry/coverage group (sometimes referred to as "relationship bankers") or you can enter in a product group. Coverage groups focus on a specific industry, such as healthcare, consumer and retail, technology, telecom, financial institutions, real estate, media, etc. They handle a lot of the deal pitches and maintain relationships with the clients. The work is more soft. Product groups focus on certain financial products; the popular ones are mergers & acquisitions and leveraged finance (although dead in the current market). As the name implies, M&A handles the modeling and valuation when a company wants to acquire another. Levfin deals with LBO modeling, certain debt underwriting, etc. Product groups are more technical and quantitative in nature. For reference, S&T (sales and trading), research, investment management operations, etc. are not considered investment banking, in case you were referring to these positions in your initial question.

Q: How different and similar is the culture within an Equity Research department and the Investment Banking dept?
Culturally, what are some of the major similarities and differences between an Equity Research department and a Investment Banking department?

A: Factual and objective reporting make up a major cornerstone of equity research. However, and this must be stated, in terms of being objective, equity research analysts in large securities firms are not "purists." The recommendations found within finalized research reports makes this true. As far as my understanding of IB, they usher companies into the capital markets and help them stay healthy in order to underwrite secondary offerings and provide advisory services. In other words, make more money off of them. Analysts in both departments do alot of travelling to companies in order to meet with CEOs and CFOs. An equity research analyst will have a longer visit if they want a guided tour of the company's operations.

Q: If I have been running my own company, can someone get into investment banking?
I am planning on going to graduate school and get my mba. I have been building and developing appartment buildings. I am thinking about changing careers and possibly going into investment banking. Is it diffiuclt to switch if you have no financial analyst expierence or previous Investment Banking analstst background. IB has alyways sounded interesting to me. But I know how difficult it is to get into. It is like a old boys club and extremely difficult now thesedays to transition into if you have no expierence or interships in from college.

A: How about into commercial lending first...? e-mortgagenetwork.com

Q: Does tax work bring any value to my resume for obtaining an investment banking internship?
I am currently working in taxes, doing corporate and individual tax returns. Does my current job add any value to my resume when I apply for an investment banking internship? If not, what can I do to enhance my resume, in hope of landing an ibanking internship?

A: Not to offend, but don't listen to the first answer. It may help you if you're volunteering at a hospital, but for an I-banking job will throw you under the bus. I find it's best to be honest when it comes to the cut-through world of being an I-banker, so without further delay... Fact is, you can't hope to "impress" in person because about 92% of applicants don't get an interview (sounds high, but is accurate). Also, if it is just "simple" such as "familiarization with tax code", it will be discarded. You need to impress enough on paper for them to want to meet you. And remember, almost everyone applying for the job has relevant experience, so be as unique yet relevant as possible. Sell them right away on what you have that they might be missing or need. Yes, the tax work could help. The knowledge must have come from somewhere (likely accounting work or financial analysis)--that of which is one of your selling points. A big ticket item in banking is your accounting strength more so than anything. (well that and a type A personality that oozes with confidence) The other answer is right though--leave it to 1 page. Anymore and it won't be looked at. Feel free to email it over. I've helped a number of friends prepare resumes for their I-banking interviews, and I wouldn't mind taking a minute. And they were hired (Morgan Stanley, UBS, and JP Morgan).

Q: What type of degree is neeeded for a career in investment banking?
What degree is needed to obtain a career in finance / investment banking?

A: Depends what school you go to and for when you are asking (straight out of undergrad or after some work experience) : If you go to an Ivy League school, you can basically major in whatever you want. Plenty of History, Poly Sci, etc. majors can get I-banking jobs. You have to demonstrate a basic grasp and interest of corporate finance in the interviews though. If you don't attend one of those schools, I'd recommend majoring in finance (Econ is a second choice). Corporate finance is a core concept in investment banking. If you can double major or minor in engineering, science or math, it'll add some intellectual credibility since they are regarded as 'hard' subjects. If you are already in another career and looking to get into I-banking and do not have much financial experience, I'd generally say to pursue an MBA (must be a top 20) to apply as an Associate. I-banks hire plenty MBA students without any previous banking experience.

Q: How much would an internship with a big 4 accounting firm help me if i want to get into investment banking?
How much would an internship with a big 4 accounting firm help me if i want to get into investment banking?

A: Well did you realize that big 4 accounting is for accounting? if you want to get into investment banking then go work at a investment banking firm. It will help as experience in the professional work environment but not specially with the financial part.

Q: How do I get a contract job in IT in investment banking?
I'm a contractor with lots of experience as a business analyst but none in investment banking. I seem to have have no way in to investement banking without prior experience. How have others made the transition?

A: Investment banks definitely hire non-investment bank people some times. They need "new blood". Read some books on the products like John Hull's, "Options, Futures and other Derivatives" although that ones's a bit difficult. You could also read up on www.investopedia.com. Make sure you know what options, futures and swaps are. Also know delta, gamma, vega and theta. You'll need to go through a recruitment firm I'm sure. When you finally do get an interview, if it's for developing trading software, emphasize any real-time systems you may have worked on in the past. Also your ability to work under pressure, on shorter term projects, and abilities to deal with difficult users. Express an interest in finance. Good luck.

Q: What is an investment banking career like?
I am about to graduate Ohio State with a degree in personal finance, and psychology. I am taking the path to a career in financial planning...maybe for ameriprise financial but the idea of investment banking has provoked my curiosity. Can anyone tell me what its like? thanks very much Oh, and I'm aware the economy is bad right now...but in terms of finance careers...I've thought about it and I think that this economic crises might cause people to seek professional advice moreso than ever

A: At the moment? It's an ulcer and the contemplation of jumping out of a window. But luckily for you this means that there should be some openings.

Q: What college is best for a career in Investment Banking?
What college would be best for a career in investment banking and what do they offer that makes them better?

A: the best ones are the ones which has your favourite investment banks come in on the campus to interview soon to be graduates. These are the so-called 'target schools'. I graduated from Baruch, a very good school in New York, albeit not a the same level of prestige as Columbia or NYU, but last year was made a 'target' school by JPMorgan. So ask your potential schools, which investment banks come recruiting on campus.