Is Investment Banking A Good Career?

13-Jun-2022

When considering a career prospect, the most significant aspect that comes to the fore is the pay package and the growth possibilities in the future. Talking about a career in Investment banking, Yes, it is an excellent career choice, and it is amongst the most favorable and prestigious jobs in the finance industry.

Investment Bankers are among the highest-paid in the world. New employees may expect to make six-figure salaries right out of school. These perks are not available in other fields,

Investment bankers are professionals that assist businesses in obtaining cash through a variety of methods. 

They are among the most in-demand experts in the sector since they deal with huge financial transactions. There are several factors that explain a career in Investment Banking as an excellent choice which we will explore here in this post. Let us first understand what Investment Banking entails.

Defining Investment Banking

An investment bank is a type of bank that helps businesses, governments, and other organizations raise cash through underwriting, securities issuance, or a combination of the two. It also assists companies with mergers and acquisitions (M&A) as well as other ancillary services such as derivatives trading, stock issuance, and placement, among other things.

Discovering the various Jobs in Investment Banking

A career in Investment banking will expose you to these various opportunities of jobs in Investment Banking as discussed below:

Underwriting: It is one of the most important responsibilities of investment banks since it assists corporations and governments in generating capital through the issuing of equity and debt.

Merger and Acquisition: You could work in the Mergers and Acquisitions (M&A) department, which provides strategic advice to businesses looking to merge or acquire another. They provide advice to buyers and sellers on business valuation, transaction pricing and structuring, negotiation, and implementation. These individuals have a particular skill set that allows them to ensure that such transactions make sense and are long-term feasible for the organization.

Private equity: This is one of today's most prestigious careers. It entails investing in asset classes that include debt and equity in companies that are not publicly traded. KKR and Blackstone are two well-known private equity organizations.

Venture Capital: This job has some similarities with that of Private Equity. The sole distinction between them is that venture capital funds startups while private equity funds existing businesses. Being a venture capitalist necessitates a unique combination of talents, as the job entails selecting companies that are still in the early stages of development yet have enormous promise in the future. Most businesses are doomed to fail, but a small number of successes can compensate for a huge number of losers.

Equity Research: One of the most crucial aspects of the Investment Banking job is - Equity research. They come with buy and sell-side research, which makes trading securities easier. Their reports are primarily intended for internal use, but they may sell them to hedge funds or mutual fund managers to supplement their income.

Proprietary Trading: This is also practiced by some firms. It's a trading desk that allows traders to trade in various securities such as stocks, bonds, currencies, and commodities using the firm's own funds rather than the funds of depositors.

Asset Management Firm:  Investment Banking also serves as an Asset Management firm, managing large portfolios for clients such as insurance companies, pension funds, and other financial institutions. They assist their clients in reaching their objectives by ensuring that their portfolio contains the correct balance of diverse securities such as stocks, bonds, and real estate. 

Apart from these opportunities, there are also jobs in investment banking for freshers that beginners can pursue before accumulating much experience. One may start as Finance Intern, Finance Analyst, Analyst - Lending Operations, and a few more. 

It goes without saying that Investment Banker is a prestigious career position with handsome pay. It is the best-paid position in the finance industry across the globe. Being pragmatic is a necessary element when looking out for a career, and hence it matters that one scan through the skill sets and sees if it is up to one's capacity. If you have the skills, interest, and intelligence required for this position, this sure is your calling. There can be no better advantage than to become a financially independent person at a young age.

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