Investment Banking: One of the most lucrative careers in the industry

Doesn’t Investment Banking sound too good? The first time when you hear the word investment banking, you get images of working with JP Morgan, Goldman Sachs, Morgan Stanley, etc…….right? Of course, investment banking is one of the highest paying jobs that are around! So, who wouldn’t want to take up a lucrative fat paying job? But, the challenge is to get the skills and qualification to get into the market. The strategy adopted by most interns is to look out for internship jobs to gain experience working with top investment banks. Yet, others look for a solid educational back up, such as finishing up a PGDM in Financial Management from one of the top business schools in Delhi NCR, to grab a good opportunity in investment banking.

The prior looks good but comes with many challenges as there are thousands of applicants for just one single internship job opening, which reduces the probability of your selection to almost negligible. And, while opting for this you need to target as many internships as you can to make your candidature stronger for a full-time job after passing out. The conversion rate from an internship to a full-time job is as low as 26%. The later looks more promising as it gives you the right platform to learn and acquire the needed skills to be an investment banker.

What is investment banking?

Though, there is a lot of gaga about investment banking, yet many of us are unaware as to what investment banking really is?

So, first let us dig deeper in to the understanding of investment banker’s job. Here, is what I-bankers do:

  • They serve to the businesses and not the individuals.
  • They raise funds for the business and not invest into it.

Let us see in detail, the job of an investment banker:

Management of Capital: You must have heard of IPO or Initial Public Offering where in a company for the first time invites public to invest in their company. This is where Investment bankers are needed. I-bankers guide the entire process of generating IPO for the first time for any organization. Other than this, their job is to provide advisory on FPO (Follow on Public Offer), Debt Placement, Qualified Institutional Payment (QIP), Preferential Issues, etc.

Mergers and Acquisition Advisory: The other popular example of an investment banker’s job is to facilitate the Mergers and Acquisitions. The companies need Investment Bankers when they are buying out other firm or when they are being bought out themselves. The entire process is guided and supervised by an investment banker.
Another job of an Investment Banker is to invest in Venture Capital and Private Equity Funding. VC and PE funding is about investing in companies by buying out shares of it. VC usually involves investment in promising start-ups whereas PE funding is about investing in well-established firms. This is again guided by I-bankers totally.
For, doing all these analysis and guiding businesses to take the right steps in their favour, the I-banker is paid a small percentage of around 2-3% of the entire deal. This itself is a huge amount of big transactions done in M&A or fund investment.
After having understood, what an investment banker does, let us figure out the ways of getting into it. One of the ways discussed earlier is to take up internship jobs in IB firms to gain relevant experience but the probability of getting hired by the same firm as a full time I banker is quite low. So, let us now focus on the other option of pursuing a master’s degree to back up your career as I-banker.

Corporate Advisory: Big corporates hire I-bankers to get their business appraisals done. The job of I-banker is to develop a supporting business plan and restructure corporates to get the most attractive investments.

Which educational degree supports I-banker’s career?
Exposure that you get from a top PGDM college in Delhi or other metros brings you great chances of getting hired by the top investment banking firms. These days, hiring is knowledge-specific, so if you are bringing the relevant work experience with MBA, then, there is no looking back. Good risk management firms will be readily taking you on job.
Moreover, it is extremely important to have a good brand value attached to your PGDM program. It increases the chances of getting hired by best investment firms in India and abroad. The top players of any industry choose to visit the top ranking management institutes of India to hire the cream of the lot.
In India, the top recruiters for I-banker’s profile are Barclay’s capital, B.N P Paribas, Citi Bank, Deutsche bank, JP Morgan, Kotak Mahindra Bank, etc.

So, let us see what all streams you must opt for in order to build a career in Investment Banking
PGDM in Financial Management is the most preferable option to choose if you want to be an investment banker. The only catch point here is that you must be an MBA from top business schools in Delhi and all over India to land up with a decent job. MBA’s are preferred over CFA’s as they are looking for somebody who is an all-rounder including good communication skills, leadership traits, and technical skills and ethically sound. So, be wise to opt for a well-recognized PGDM course in management.

How Investment Bankers are recruited in India?
You would be surprised to see that there is a different culture of hiring investment banker’s because of the nature of the job. Here, is how they are recruited:
• Hired by top management: Usually, you wouldn’t find any HR coming to grill you for recruitment process. Rather, I-bankers are hired by MD’s directly as they are the key runners of the businesses, so they need to be selected diligently.
• Ethics play a key role: I-bankers are dealing with millions of bucks every day so it is extremely important to be ethical towards your job. This is something that is tested all throughout the interview as the stakes of hiring you are too high.
• The key determiners: Knowledge, leadership quality, technical skills, and motivation is what the recruiters look for in I-bankers. The resumes are shortlisted by the MD himself. The candidates are interview by the top management and only the best fits are called for the last round. Most of the questions are targeted on checking the knowledge of the candidate.
• GPA matters: You aggregate score in Master’s degree will help you to get through the initial screening process. Yes, GPA scores are considered important for this profile. The interview panel tries to judge your interest and willingness as I-banker. Most candidates come for this job because of fat pay packages but those fat pays are available only when you are perseverant and hard working in your job.

Hence, it is important to plan your career well in advance. I-banker jobs seldom happen by accident. The ones who have planned and cracked the best B-schools for PGDM programs are the ones who make it to the top.
Asia-Pacific Institute of Management offers a full -time two year PGDM program in Banking and Financial Services. The management program is duly recognized by AICTE and Ministry of HRD. We take pride in sharing that AIM is ranked 9th in best B-school in Delhi and NCR and ranked 11th in North Zone of Best B-schools in MDRA survey 2017.

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