How to become an investment banking analyst


How to become an investment banker

Investment banking is one of the trending professions in the world right now. Investment banking is one of the finance career paths an individual can take and become a professional in. According to the economic times as published on their website, investment banking is one of the special and reserved segments of the major banking operations that revolves around and help organizations and individual in obtaining or raising capital for their projects and also help in providing the services of financial consultancy to these individuals and organizations.

Investment bankers also play the role of financial intermediaries between those who issue securities and potential investors. Apart from these services, investment bankers also help new and growing firms go public giving them deserved recognition.  They can either buy the majority of the current and available shares of a firm at a fixed price and reseller to the public showing interest and taking some commission on the shares sold.

The activities of investment banking are quite wide as investment banking count itself as one of the most complex mechanisms of finance globally. They offer and serve a lot of purposes and business organizations. Among the activities and investment banking of investment banking is the trading of securities for themselves or organizations involved in mergers and acquisitions. It also involves leveraging finance which entails the borrowing of money to firms to purchase assets or settle acquisitions of firms. Restructuring which involves improving the physical and financial structures of an organization to make a profit is one of the services and activities involved in investment banking.

An example of investment banking and its activities is present in the case of ARC Company and MAR company. Think of a situation where ARC company acquire MAR company however ARC company is not having a clear thought on how the financial worth and long-term benefits in terms of revenues, costs, financial operations, etc attributed to the acquisition of MAR company. In this type of case, an investment banker will help to carry out all the necessary actions required before finalizing the purchase of the company. Some of the required actions will involve appraisal and estimation of the worth and value of the company to be purchased and ensuring all necessary documents are prepared and obtained by the firm during the time of purchase.

An investment banker analyst may work on two sides for a firm. They can work for a firm trying to sell or a firm trying its best to acquire or buy off another firm. The roles and services stay the same irrespective of the sides the investment banking finds himself or herself. An investment banker will serve firms, governments, or institutions by giving advice (advisory services), providing underwriting, and making necessary documents involved in mergers and acquisitions.

A branded investment bank will provide individuals, governments, and firms with a wide range of services that will involve underwriting, sales, trading, mergers and acquisitions, equity research, commercial and retail banking, and asset management. This is in contrast to a division of a bank involved in investment banking that will only carry out the services of mergers and acquisitions advisory services and underwriting.

Steps involved in becoming an investment banker

One of the trending questions today is how to become an investment banker? Becoming an investment banking analyst requires a lot of skills as the profession requires a lot of financial modeling using software and financial valuation. Whether it involves investment or not, bankers really spend a lot of time trying to work on excel, build financial models, and also trying different financial valuation methods to determine and give advice to their business clients for the finalization of business/investment deals. Some of the needed skills for an investment banker are:

§  Financial Modelling using software such as excel

§  1. Business finance valuation

§  2. PowerPoint presentation and Pitchbook

§  3. Financial transaction documents

§  4. Client relationship management

§  5. Sales and business development

§  6. Negotiation

The careers path and level in investment banking are

§  1. Analyst

§  2. Associate

§  3. Vice President

§  4. Director

§  5. Manager Director

§  6. Head

§  7. Vice-Chairman

§  8. Other special titles

Becoming an investment banker will always be and remain a notable profession in many years to come.

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