9 answers
Rukmini
Student
Glenelg, Maryland
2
Questions
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What do investment bankers do? How many hours do they work? How much money do they make per year and is it worth it since I have heard that the hours are long?
#finance #money #college-admissions #salary #college
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9 answers
Doc Frick
Career Coach and Mentor
1616
Answers
California, CA
Updated
Doc’s Answer
Rukmini If you're thinking about a career as an investment banker, you will need at least a bachelor's degree and some work experience, as this is not an entry-level position. Some firms only hire candidates with master's degrees, and most investment bankers work in their own offices or they travel to their
INVESTMENT BANKERS JOB DESCRIPTIONS
Investment bankers may act as portfolio managers or fund managers. These professionals typically work in an office setting, but may travel to a client's workplace in order to conduct meetings and presentations. For example, some investment bankers may meet with clients to arrange and negotiate large financial transactions for businesses looking to expand their operations.
• INVESTMENT BANKING PORTFOLIO MANAGERS – A portfolio manager is a high-level financial analyst who makes executive decisions for a company or client. These managers typically work for portfolio management firms or investment banks; however, they can find employment at a variety of firms. The duties of a portfolio manager include supervising a team of financial analysts and creating a financial portfolio for a company or client. Portfolio managers help decide the mix of industries, products and regions in which they invest. Portfolio managers are also expected to lead investor meetings and be able to alter portfolios quickly, reacting to market changes.
• INVESTMENT BANKING FUND MANAGER – Investment fund managers help their clients determine the best investment strategies. Their objective is to help their clients earn as much money through their investments as possible. They will meet with clients to discuss their needs and set investment goals. Their duties can also involve researching companies and investment options so that they know which investment options are most likely to be secure investments. As part of their duties they may oversee investment purchases or trades. They also constantly check on the performance of their clients' investments to ensure that they are meeting expectations.
INVESTMENT BANKERS EDUCATIONAL REQUIREMENTS
A bachelor's degree in business administration or a related field like finance is required to become an investment banker, though many employers prefer or require a master's degree. Firms may prefer to hire applicants who have earned an advanced degree, like a Master of Business Administration (MBA). Often lasting one to two years, MBA programs typically cover topics ranging from strategic management to asset analysis. Students may also be given the opportunity to work on projects for different firms, allowing them to gain an advanced insight in the field.
Due to keen competition for jobs, students are generally advised to complete an internship prior to graduating. Internships allow students to work within an investment bank, analyzing assets and portfolios using valuation models. These positions help students hone their analytical skills, as well as network within the field. Connections made during internships can help aspiring investment bankers secure a job after graduating. Investment banker isn't usually an entry-level position. Instead, college graduates typically begin as analysts and work with associate or more senior-level managers. Analysts assist in the research and study of market data and industry trends. Some firms prefer candidates who have analytical experience within a given job description like M&A.
INVESTMENT BANKERS SALARY OUTLOOK
On an absolute basis, investment bankers are some of the highest-paid professionals for their age. As a new hire, you can expect to earn over $100,000 straight out of school, which will probably blow most of your classmates out of the water. Investment banking professionals are paid based on two components of compensation: salary and bonus. The bonus is a large part of a banker’s total income across all positions, but especially at the more senior levels, where a bonus can be several times the base investment banker salary.
• PRO – They’re paid so much because the banks work on very important transactions that generate big fees. In exchange for such important work, they need to be smart, hard-working, and highly skilled – and thus, well-compensated.
• CON – They’re paid a lot because the work is super stressful, with a military-like hierarchy, and the hours are unbearable. In fact, the hours are so long that they don’t actually make that much per hour.
• Investment Portfolio Manager • Master's Degree • Salary Range is $107,600 – $148.500 as of May 28, 2020.
• Investment Fund Manager • Master's Degree • Salary Range is $88,500 – $150,250 as of May 28, 2020.
• Investment Banking Associate • Bachelor's Degree • Salary Range is $90,000 – $120,000 as of May 28, 2020.
• Investment Banking Analyst • Bachelor's Degree • Salary Range is $73,500 – $104,000 as of May 28, 2020.
Hope this was Helpful Rukmini
INVESTMENT BANKERS JOB DESCRIPTIONS
Investment bankers may act as portfolio managers or fund managers. These professionals typically work in an office setting, but may travel to a client's workplace in order to conduct meetings and presentations. For example, some investment bankers may meet with clients to arrange and negotiate large financial transactions for businesses looking to expand their operations.
• INVESTMENT BANKING PORTFOLIO MANAGERS – A portfolio manager is a high-level financial analyst who makes executive decisions for a company or client. These managers typically work for portfolio management firms or investment banks; however, they can find employment at a variety of firms. The duties of a portfolio manager include supervising a team of financial analysts and creating a financial portfolio for a company or client. Portfolio managers help decide the mix of industries, products and regions in which they invest. Portfolio managers are also expected to lead investor meetings and be able to alter portfolios quickly, reacting to market changes.
• INVESTMENT BANKING FUND MANAGER – Investment fund managers help their clients determine the best investment strategies. Their objective is to help their clients earn as much money through their investments as possible. They will meet with clients to discuss their needs and set investment goals. Their duties can also involve researching companies and investment options so that they know which investment options are most likely to be secure investments. As part of their duties they may oversee investment purchases or trades. They also constantly check on the performance of their clients' investments to ensure that they are meeting expectations.
INVESTMENT BANKERS EDUCATIONAL REQUIREMENTS
A bachelor's degree in business administration or a related field like finance is required to become an investment banker, though many employers prefer or require a master's degree. Firms may prefer to hire applicants who have earned an advanced degree, like a Master of Business Administration (MBA). Often lasting one to two years, MBA programs typically cover topics ranging from strategic management to asset analysis. Students may also be given the opportunity to work on projects for different firms, allowing them to gain an advanced insight in the field.
Due to keen competition for jobs, students are generally advised to complete an internship prior to graduating. Internships allow students to work within an investment bank, analyzing assets and portfolios using valuation models. These positions help students hone their analytical skills, as well as network within the field. Connections made during internships can help aspiring investment bankers secure a job after graduating. Investment banker isn't usually an entry-level position. Instead, college graduates typically begin as analysts and work with associate or more senior-level managers. Analysts assist in the research and study of market data and industry trends. Some firms prefer candidates who have analytical experience within a given job description like M&A.
INVESTMENT BANKERS SALARY OUTLOOK
On an absolute basis, investment bankers are some of the highest-paid professionals for their age. As a new hire, you can expect to earn over $100,000 straight out of school, which will probably blow most of your classmates out of the water. Investment banking professionals are paid based on two components of compensation: salary and bonus. The bonus is a large part of a banker’s total income across all positions, but especially at the more senior levels, where a bonus can be several times the base investment banker salary.
• PRO – They’re paid so much because the banks work on very important transactions that generate big fees. In exchange for such important work, they need to be smart, hard-working, and highly skilled – and thus, well-compensated.
• CON – They’re paid a lot because the work is super stressful, with a military-like hierarchy, and the hours are unbearable. In fact, the hours are so long that they don’t actually make that much per hour.
• Investment Portfolio Manager • Master's Degree • Salary Range is $107,600 – $148.500 as of May 28, 2020.
• Investment Fund Manager • Master's Degree • Salary Range is $88,500 – $150,250 as of May 28, 2020.
• Investment Banking Associate • Bachelor's Degree • Salary Range is $90,000 – $120,000 as of May 28, 2020.
• Investment Banking Analyst • Bachelor's Degree • Salary Range is $73,500 – $104,000 as of May 28, 2020.
Hope this was Helpful Rukmini
Angela D'Agostino
Compliance Associate
6
Answers
New York, New York
Updated
Angela’s Answer
In addition to the responses already given, if you're part of the right team, you can develop quickly and obtain the right skills and relationships to make multiples upon multiples in the form of a performance bonus. It's also great training for a host of other related industries, such as venture capital and private equity.
Omar Farris
Corporate Finance Senior Associate
8
Answers
Riyadh, Riyadh Province, Saudi Arabia
Updated
Omar’s Answer
Hi Rukmini,
I currently work in Mergers and Acquisitions so I'll give you a little more information about that. As an investment banker in M&A you will be working on sell-side or buy-side transactions a majority of the time. Depending on your level you will have different tasks but I'll give you the full scope of what a process looks like.
When you are engaged on a sell-side transaction you have to:
1) Start preparing strawman transaction structures to help your client assess how they want to do (sell minority stake, majority stake, merge into a new entity, etc..). The client may come prepared and know exactly what they want to do which would negate this step.
2) in parallel you would begin populating a potential investors list
3) Once you've narrowed down what the transaction will look like and the potential investor universe, you prepare a teaser (1 pager with quick highlights about the company on a no name basis) along with an NDA to have interested potential investors to sign to receive more information.
4) In parallel to the teaser, you would be developing a confidential information memorandum which would be a large powerpoint deck that explains everything about the firm and the market it operates in.
5) Once you receive signed NDA's you shoot out the investor memorandum to the potential investors and wait a few weeks to hear back from them.
6) While you wait you would create an indicative valuation using public company comparables, precedent transaction comparables, and discounted cash flows (depending on which is more appropriate you may weight results differently) to narrow down a range for what the company is worth and where you want the investors offers to ultimately fall within.
7) after a 2 or so weeks interested investors would respond with a non-binding offer which would include the preliminary purchase price that is dependent on due diligence findings (which would be the next step if the NBO is accepted).
8) The due diligence period lasts around 4 months or so and would be more of a coordination and project management role for us. We coordinate with the buyers diligence advisors and help or client provide requested data and respond to questions posed by the buyer and his advisors
9) Once diligence is complete we move into the final phase which is transaction documents and closing. This stage includes negotiating the commercial inputs of the transaction documents which would mean negotiating the reduction the buyer is trying to get given diligence findings from the purchase price he indicated on the NBO. There is a little more in this stage including conditions precedent that you can research. This phase is usually kept for more senior members of a team.
I currently work in Mergers and Acquisitions so I'll give you a little more information about that. As an investment banker in M&A you will be working on sell-side or buy-side transactions a majority of the time. Depending on your level you will have different tasks but I'll give you the full scope of what a process looks like.
When you are engaged on a sell-side transaction you have to:
1) Start preparing strawman transaction structures to help your client assess how they want to do (sell minority stake, majority stake, merge into a new entity, etc..). The client may come prepared and know exactly what they want to do which would negate this step.
2) in parallel you would begin populating a potential investors list
3) Once you've narrowed down what the transaction will look like and the potential investor universe, you prepare a teaser (1 pager with quick highlights about the company on a no name basis) along with an NDA to have interested potential investors to sign to receive more information.
4) In parallel to the teaser, you would be developing a confidential information memorandum which would be a large powerpoint deck that explains everything about the firm and the market it operates in.
5) Once you receive signed NDA's you shoot out the investor memorandum to the potential investors and wait a few weeks to hear back from them.
6) While you wait you would create an indicative valuation using public company comparables, precedent transaction comparables, and discounted cash flows (depending on which is more appropriate you may weight results differently) to narrow down a range for what the company is worth and where you want the investors offers to ultimately fall within.
7) after a 2 or so weeks interested investors would respond with a non-binding offer which would include the preliminary purchase price that is dependent on due diligence findings (which would be the next step if the NBO is accepted).
8) The due diligence period lasts around 4 months or so and would be more of a coordination and project management role for us. We coordinate with the buyers diligence advisors and help or client provide requested data and respond to questions posed by the buyer and his advisors
9) Once diligence is complete we move into the final phase which is transaction documents and closing. This stage includes negotiating the commercial inputs of the transaction documents which would mean negotiating the reduction the buyer is trying to get given diligence findings from the purchase price he indicated on the NBO. There is a little more in this stage including conditions precedent that you can research. This phase is usually kept for more senior members of a team.
Ali Hajj Diab
Associate
8
Answers
Beirut, Beirut Governorate, Lebanon
Updated
Ali’s Answer
Investment Banking.
If you read some of the articles today, you may see that one of the biggest investment banks in the world are overworking their employees, some are reaching up to 92hrs-100hrs per week. Usually investment banker are hired from Ivy Leagues. The pay-off is good and the experience is exponential, however this comes at a price: drop your social life. Associates often sleep in the office and work 7 days a week. As a new joiner, you will be expected to drop everything, even if your brother/sister is getting married, you need to drop it.
If you read some of the articles today, you may see that one of the biggest investment banks in the world are overworking their employees, some are reaching up to 92hrs-100hrs per week. Usually investment banker are hired from Ivy Leagues. The pay-off is good and the experience is exponential, however this comes at a price: drop your social life. Associates often sleep in the office and work 7 days a week. As a new joiner, you will be expected to drop everything, even if your brother/sister is getting married, you need to drop it.
Richard A.
physician
2150
Answers
Updated
Richard’s Answer
My son is an investment banker, so I will answer from his experiences.
85K salary is standard across the street for first years, 95K second year, same third year as analysts, with a large step up if you get promoted to associate. Bonuses depend on the tier of the firm and range from low 25K to as much as 100% of salary at top tier firms by second year.
Hours range from 60 to 120 and are hugely dependent on culture and firm.
For tasks, think Excel and Powerpoint. Writing, reading, modelling, learning about companies, and, above all, making it all look presentable.
85K salary is standard across the street for first years, 95K second year, same third year as analysts, with a large step up if you get promoted to associate. Bonuses depend on the tier of the firm and range from low 25K to as much as 100% of salary at top tier firms by second year.
Hours range from 60 to 120 and are hugely dependent on culture and firm.
For tasks, think Excel and Powerpoint. Writing, reading, modelling, learning about companies, and, above all, making it all look presentable.
Jian Kang
Quantitative Analyst
4
Answers
McLean, Virginia
Updated
Jian’s Answer
John's and Bri's answers are very good.
I can only add that long hours shall not be a big concern for the newly college grads. I know a lot in investment banking move to other areas after a few years. however the few years in IB will surely look good on your resume either you switch your career, or pursue MBA.
I can only add that long hours shall not be a big concern for the newly college grads. I know a lot in investment banking move to other areas after a few years. however the few years in IB will surely look good on your resume either you switch your career, or pursue MBA.
David Hou
Technical Writing Intern
4
Answers
Chicago, Illinois
Updated
David’s Answer
John has already included a lot of very helpful info. I'll just add a bit of color. Investment bankers right out of college can work up to 80 hours a week, which is a lot. I would say that the primary attraction to the role is the compensation -- however, I can't say that work life balance would be great, considering the long work hours. Before deciding what career you'd want to have, I would say definitely explore other possibilities before deciding. Finance and banking in general is a very lucrative as well as competitive field. Many firms have great benefits and perks, but the main cautionary tale I've heard is the lack of balance from the job.
Aditi Agarkhed
Alternative Investments Intern
11
Answers
Lawrence Township, New Jersey
Updated
Aditi’s Answer
Adding to all of the great responses above, investment banking is a great starting career. The hours are definitely long and tiring, but it also provides you the opportunity to learn so much in a short amount of time. You will have to be well versed in excel and powerpoint, as well as being a good cultural fit
Britni Scott
Human Services Caseworker
38
Answers
Tinley Park, Illinois
Updated
Britni’s Answer
Hi,
Investment bankers advise companies on large, corporate-level transactions of debt and equity issuances.
Advise companies work with management teams to market and sell companies, find potential targets to acquire, and make deals go through; or recommend the best terms and timing for a capital raise and then market that debt or equity issuance to investors.
As an investment banker you work part advice, part sales and marketing, and part negotiation and deal-making. The job is to do whatever it takes to support senior bankers in winning and closing deals, even if that means doing ridiculous tasks that have nothing to do with accounting or finance. The average work hours will be in the office 70-85 hours per week, though you won’t necessarily be “working” that entire time. Base salaries at large banks in the U.S. are just under $100K USD.
Bonuses are often 0.5x to 1.0x your base salary, so average total compensation might be between $150K and $200K.
Pay is lower outside the U.S., even in other financial centers such as London, and pay also tends to be lower at boutique investment banks. Also check out this website https://www.mergersandinquisitions.com/investment-banking-analyst-job/ it has more in-depth information that you are looking for. Hope this helps, good luck!
Investment bankers advise companies on large, corporate-level transactions of debt and equity issuances.
Advise companies work with management teams to market and sell companies, find potential targets to acquire, and make deals go through; or recommend the best terms and timing for a capital raise and then market that debt or equity issuance to investors.
As an investment banker you work part advice, part sales and marketing, and part negotiation and deal-making. The job is to do whatever it takes to support senior bankers in winning and closing deals, even if that means doing ridiculous tasks that have nothing to do with accounting or finance. The average work hours will be in the office 70-85 hours per week, though you won’t necessarily be “working” that entire time. Base salaries at large banks in the U.S. are just under $100K USD.
Bonuses are often 0.5x to 1.0x your base salary, so average total compensation might be between $150K and $200K.
Pay is lower outside the U.S., even in other financial centers such as London, and pay also tends to be lower at boutique investment banks. Also check out this website https://www.mergersandinquisitions.com/investment-banking-analyst-job/ it has more in-depth information that you are looking for. Hope this helps, good luck!