A day in the life of an Investment Banker!
Investment banks have several departments, ranging from the trading desk to the mergers team. The traditional role of an investment banker involves being part of the mergers and acquisitions team, and potentially helping a company with their equity and debt offerings. When not staffed on a deal, bankers work on pitching to new clients. Let us understand the skill set of an investment banker:
- Research skills: Identifying business opportunities in new and unusual areas is an essential skill set. It may involve helping a business build from scratch by funding a team of enthusiasts, or spotting expansion or mergers opportunities within existing businesses. Hence, entrepreneurial and research skills are important. If you’re working in a new sector, you should be able to read reports to understand the background of the industry and company you are valuing.
- Financial modelling: As an investment banker you’ll be required to create financial projections and analyze a deal’s value. You should be able to read financial statements and derive estimates and assumptions by looking at data. This will help you derive the value of the deal. Understanding the nuances of accounting for different industries and countries is important, as well as the treatment of taxation. Identifying risks and hence the discount rates for the transaction are important.
- Communication skills: Investment banking involves the ability to persuade. An investment banker must be able to convince clients to buy-in to his / her reasoning. Thus communication and presentation skills are one of the key skills required in this field. These include making good spreadsheets, documents, and slideshows, written and verbal communication. Investment bankers deal with extreme situations, difficult clients, unfamiliar settings and diverse cultures. Therefore they should demonstrate the ability to build connections and maintain healthy client relationships.
An average day in the life of an investment banker is long and stressful. The day is a mix of meetings, desk analytics, reworking your model and presenting it to your managers and clients. A typical investment banking analyst usually works for 90-100 hours per week or even more. Investment banking is a well paying and coveted job. If you are successful, there is a bonus payout which can often be as high as your base compensation. While the job is not for everyone, those who enjoy finance and the thrill of a deal often achieve financially rewarding careers.