Investment Banking is an arm of banking that creates capital for other entities like companies, governments, etc. Apart from underwriting new debt and equity securities, Investment Banks also help in Mergers & Acquisitions, brokerage, sale of securities, etc.
1) Investment banking’s not just for finance majors
It’s a well-known fact that for most of the finance majors, Investment Banking is a dream job. But the truth is investment banking is not just for finance professionals. In recent times many global investment banks are actively recruiting computer science graduates or software professionals who are adept at coding.
Leading investment banks are open to applicants from all majors such as Economics, Computer Science, Statistics or Mathematics. These days many investment banks are also seeking Business Analytics and Data Science professionals for a wide spectrum of roles.
2. The hours are more gruelling than other finance areas
Investment Banking work is one of the most gruelling works in the field of finance. A 60-70 hour work week is common in Investment Banking. On a global level, investment bankers have also been reported to work for 100 hours a week during the busy periods. The work though very glamorous also has the highest stress levels.
3) Your knowledge in quants would be tested right from the interview stage
Just as typical consulting jobs, investment banks also conduct a specialised kind of interview. This includes knowledge of quantitative aspects. The quant interview tests your knowledge on technical topics such as accounting, risk assessment or valuation.
You may be typically asked to analyze a financial statement or work on modelling the statements, especially elements like Net Profit, Working Capital, Capital Expenditure, Goodwill etc. While you may be prepared for Financial Statement modelling, the interviewer may take you by surprise and throw challenging numerical brain teasers at you to see how you perform during stress.
4) Excel is your secret warrior
Excel is not just a tool to analyse your finances, but also the backbone of your investment banking career. So if you want to be an asset to the company, you should sharpen your skills at Excel VBA/Macros even before you join as an investment banker.
Whether it is doing a financial projection, running iterative calculations, analysing a competitive landscape or checking the worthiness of a deal, all the quantitative calculations need to be performed on excel. Your skills should not just be limited to knowing and leveraging the features of excel, but also the agility with which you perform the calculations.
Some experts do not even look at the mouse or keyboard while working on spreadsheets. Their hands are adept enough to work on the keyboard.
5) Network with your colleagues from day 1:
As an Investment Banker you cannot work in isolation. There is a lot to learn from associating yourself with the right people. From the first day itself, you need to be close with a good Associate/Sr. Analyst.
Let them know that you just really want to do well and look up to them for guidance on improvement scope.
6) Unpredictable Nature of Work
The nature of work is unpredictable. Sometimes you would be expected to work on pitch books, or preparing a financial model, while at other times you will be working on a deal memorandum, profiling prospective acquisition targets etc.
There will also be days when you would only be working on excel spreadsheet the entire day. So, you will have to handle a mix of responsibilities and not just a single task/ profile. There will also be days when you will be expected to work on tasks which are mundane not challenging enough such as copy pasting, photocopying, booking meeting rooms etc.
7) Money is not always a motivation
You know that you would be paid really well as an investment banker. However, after the initial excitement related to the job dies down, there could be a time where you realize that money no longer can be the sole motivation if you do not enjoy the work from within.
It can be the stress or the mundane work which makes you realise that Investment banking is no longer attractive and you would want to settle for a less demanding job. These are the times when you need to introspect and revisit the reasons why you opted for Investment Banking and re-motivate yourself to hold on to it and take up more challenges.