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Things you must know about investment banking

A photo of female manager explaining strategy to executives. Businesswomen are discussing over documents at desk in office. Professionals are at workplace.

If you have been looking at investment banking as a career, then, you must know a few things that you weren’t taught in your finance degree. There’s so much more to know. Investment banking offers a lot of learning, along with the lucrative opportunities. Unfortunately, knowledge of finance doesn’t entirely make it. Outside it, you should develop understanding of investment banking industry.

So here are a few things you should know about investment banking

  1. Investment banking isn’t entirely finance.
    You may start as an Analyst, working on spreadsheets, crunching numbers and looking at financial models, but there’s more to it. As an investment banker, you will be required to rev up profit for your bank, participate in M &A deals, and raise funds for companies. This would require interacting with people on all levels, manage your schedule, and devote equal time to your well-being.
  1. Investment banking certifications

Many banks are hiring for investment banking roles outside finance. Since a career in investment banking offers high returns, many are choosing to go for investment banking certification and build a career in it.

  1. Investment bankers are intermediaries

Investment banking connects companies that issue securities and the public looking to buy stocks, to increase funds for the company. Investment bankers also facilitate trading for clients and foreign exchange management.

  1. Investment banking facilitates M&A

Investment banking plays a crucial role in advising companies in M&A. They look for buyers   and negotiate the best price to sell. They advise companies on negotiations, pricing, structuring, helping companies buy at the best possible price.

 5. Personal wealth management
Investment banking also deals in personal wealth management. Investment bankers assist high net worth individuals on buying, managing and selling of shares, bonds, real estate, hedge funds, and mutual funds.

6. Investment bankers are middle men

Investment banking professionals acts as middle men who connect the banks with investors.  With their knowledge and expertise of investments, they advise clients on investment opportunities. They advise clients on buying, managing and selling of shares, bonds, real estate, hedge funds, and mutual funds.

  1. Investment banking isn’t totally mathematic
    You don’t have to be a mathematical genius to be a good investment banker. However, you need strong quantitative and numerical analysis with basic knowledge of IRR (Internal rate of return), mode, and median. You can even go for investment banking certification to get extensive knowledge and wrap your head around investment banking.

8.  Investment banking happens in the front office
Most of the investment bank worthy action happens in the front office. It includes corporate finance, M & A, trading, sales and research. The front office facilitates raising funds, and advising clients. While all the tech and operations happen at the back office. Data checks are made to ensure that transactions are not false.

In addition, investment banks have middle office where trade support and risk management operate. Market analysis, setting capital, limits, and trade processing take place. Therefore, every investment banking professional is not an investment banker.

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