Jobs in the
Investments Industry I:
Investment Banking
Bryan Sudweeks
Fall 2007
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Jobs in the Investments Industry
 I. Investment Banking
• Investment banking, Asset Management, Sales and
Trading, Research
 II. Financial Planning
• Investment advising, Insurance, and Estate planning
 III. Corporate Finance
• Pension Fund Administration and Management
 IV. Financial Consulting
• Pension Fund Consulting
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I. Investment Banking
 Objectives
• A. Understand the purpose of Investment Banking
• B. Understand the structure of an Investment Bank
• C. Understand the interaction between divisions of
Investment Banking groups (and the recent
problems)
• D. Know where the potential jobs are in Investment
Banking
• E. Know how to prepare for a career in Investment
Banking
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A. Purpose of Investment Banking
 An intermediary between the capital markets
(investors) and corporations (borrowers)
 Offers strategic advice and financial analysis on
Mergers & Acquisitions, Divestitures, and Capital
Structure
 Offers Equity and Fixed Income Underwriting (e.g..
IPO’s, High Yield Offerings)
 Provides asset management advice to high net worth
individuals and institutions
 Provides Sales and Trading of Equity (Stocks), Fixed
Income Securities (Bonds), Derivatives (Options).
 Offers research and advice on publicly listed stocks
and bonds to institutional and individual investors
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B. Structure of Investment Banks
 Major investment banking divisions include:
• Investment Banking
• Intermediary between the capital markets
• Advice and analysis on M&A and Capital Structure
• Equity and Fixed Income Underwriting
• Asset Management
• Provide asset management services to investors and
institutions
• Sales and Trading
• Sales and Trading of Equity (Stocks), Fixed Income
Securities (Bonds), Derivatives (Options).
• Research
• Provide research on public stocks and bonds
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Structure of Investment Banks (continued)
Investment Bank
I-Banking
Division (IBD)
Asset
Management
Industry Groups
Private Client
Corporate Finance
Services
Product Groups
• Work with High
M&A
Net Worth Individuals
High Yield
Debt Capital Markets
Equity Capital Markets
Sales &
Trading
Buy and Sell
Financial
Securities
and Derivatives
Research
Analyze all
Public information
in order to give
advice to
investors and
sales and trading
group
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Structure of Investment Banks (continued)
Investment Bank
I-Banking
Division
Industry
Group
(Corp Finance)
Product
Group
Equity
Capital
Markets
Asset
Management
Debt
Capital
Markets
High
Yield
Debt
Manage funds
for institutions
and individuals
Sales &
Trading
Research
Private Client
Services
M&A
Equity
Consumer Products
Technology
Telecommunications
Real Estate
Utilities
Health Care
Retail
Fixed
Income
Derivatives
Economic
Equity
Consumer Products
Technology
Telecommunications
Real Estate
Utilities
Health Care
Retail
Fixed
Income
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C. What is the Interaction between
Investment Banking Divisions?
 Investment banking meets the needs of
different clientele
• Companies wanting to list equity/debt
• Individuals/institutions wanting unbiased research
for investing
• Strategic and asset management advice for
companies/individuals
 How should it be structured to maintain no
semblance of “conflict of interest”?
• A “Chinese wall” was proposed and instituted
• Certain divisions are “inside” and others “outside”
the wall
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Interaction Between Divisions (continued)
“Inside the Wall”
the Wall”
Corporate Finance
IBD
“Outside
Corporate Finance
Sales & Trading, Research,
and Asset Management
Corporate Finance
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D. Potential Jobs in Investment Banking
Where are the jobs in Investment Banking?
• Most investment banking jobs are in analysis
• Equity market analyst
• Debt market analyst
• High Yield analyst
• Mergers and Acquisitions
• Industry Analyst
• Consumer products, telecommunications,
real estate, finance, etc.
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Jobs in Investment Banking (continued)
I-Banking
Division
Asset Management
Division
Research Analyst
Analyst
Senior Analyst
Portfolio Manager
Equity
Capital
Markets
Industry
Group
(Corp Finance)
Product
Group
Debt
Capital
Markets
Assistant Analyst
Research Analyst
Analyst
Senior Analyst
High
Yield
Debt
Mergers &
Acquisitions
Research Analyst
Analyst
Senior Analyst
Consumer Products
Technology
Telecommunications
Real Estate
Utilities
Assistant Analyst
Health Care
Research Analyst
Retail
Analyst
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Senior Analyst
Jobs in Investment Banking (continued)
 What are the different types of analyst positions?
• Analysts position vary depending on who they are doing
research for, i.e., sell-side versus buy-side research
 What are sell-side analysts?
• Analysts whose work is used for selling securities to
investors, i.e. Research, Sales and Trading, etc. Analysts
prepare the research for potential investors in the hope that
investors will buy and sell companies through the I-bank
 What are buy-side analysts?
• Analysts whose work is used in the process of buying
securities for specific portfolios, i.e. Asset Management,
Private Wealth Management, etc. Analysts prepare the
research and then act on that research to buy companies.
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The Analyst Position (continued)
 Why are Investment Banking analyst positions so hard
to get?
• They provide instant exposure to senior management teams
of the largest companies in the world
• They have the highest exposure, learning potential, and
salary of any job in the Financial Services Industry (out of
college)
• They give opportunity to work in small teams, with learning
from senior partners
• After you have built experience in the field, it offers
wonderful opportunities at top business schools and
companies
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The Analyst Position (continued)
 What are the skills gained as an analyst?
• Financial modeling and strong quantitative work
• Solid Understanding of Corporate Capital Structure &
Capital Markets
• Solid understanding of companies and industry composition
and structure
• Professional presentation analysis
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The Analyst Position (continued)
 What are the responsibilities of an analyst?
• Financial Analysis and Modeling
• Discounted cash flow and Free cash flow
analysis,
• Comparable company
• Precedent transactions, and
• Leveraged buyout
• Client Exhibits and Presentations
• Market research and competitive analysis
• Client interaction
• Roadshow execution management
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The Analyst Position (continued)
 What type of work do Analysts do?
• Company Analysis (both buy and sell side)
• Financial forecasting
• Strategic analysis
• Industry Analysis (both buy and sell side)
• Strategic analysis
• Portfolio implementation, construction, and
reporting and attribution
• Investment policy statement
• Portfolio construction and management
• Portfolio reporting and attribution
• Whatever is needed to attain company goals and
objectives
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The Analyst Position (continued)
 What are the criteria used to select analysts?
• There is a record of achievement
• A strong academic record
• A balanced individual with extracurricular activities
• A good employment history
•
•
•
•
•
Strong communication skills
Evidence of being a team player
A tireless work ethic
Attention to detail
A strong analytical capability (with examples)
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E. How to Prepare for a Career in
Investment Banking
 Understand the industry, the positions, and the lifestyle
• This is a wonderful but crazy industry
• Are you suited for the lifestyle—very long hours
 Start building your contacts
• Meet with as many of the visiting speakers as possible
 Do well in your classes
• A strong GPA is important
• Have a good financial analysis project to leave with
potential employers as an example of your best work
 Look to beginning your CFA program
• It is looked on highly in the industry
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A Career in Investment Banking
 Don’t get discouraged
• Understand yourself and your goals
• Work hard and be patient—Faith precedes the miracle
 Keep your priorities in order
• Obedience is the first law of Heaven--do what you
should
• He will help take care of the rest
 Follow the Spirit
• Stay worthy of the Spirit
• He is your competitive advantage--stay worthy of His
help
 Remember the Lord’s hand in your blessings
• Always be appreciative of his blessings
• Remember to share them with others
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