What does an Investment Bank do? Principally it is supposed to carry out one major function, this function refers to the underwriting of new securities that are issued by the bank’s clients. There are many other functions that are carried out by an investment banking, which mainly involve doling out professional advice in regards of various investments, working with the two processes of mergers and acquisitions and helping out with the management of private wealth of high net worth individuals. These functions more or less make up an investment bank.
Let us come to the various departments that make up a part of an investment bank. These departments refer to finance, compliance, investment research, human resources or human capital management, investment banking, in particular, investment management, legal management controls, merchant banking, private equity, operations, securities and trading, services, technology, information risk management, IT and so on. While these may be the many departments of a bank, the professionals working herein are more often than not referred to as either Investment bankers or Investment Banking Analyst.
Most of those students who are freshly graduate out of business schools usually apply for jobs at the Analyst or Associate positions of a bank. Those who have a much larger spectrum of experience, like for instance if they have done masters in the field of Finance or those candidates with an MBA degree often apply for analyst positions and those with some more experience often end up applying for Associate Positions.
Banks are usually divided into the front office, the middle office, and the back office and similarly all the roles and positions herein also fall under these three categories alone. The front office is considered to be more of a revenue generating sector, of which two major areas include investment banking and the markets. These markets are basically where the sales, trading and research and structuring take place. It is said that an average investment banker will mostly make quite a lot more than an average trader on an annual basis.
When it comes to the middle office, the positions and roles herein consist of risk management. Most of the functions carried out over here are supposed to revolve around cost cutting, as well as the analysis and the evaluation of various risks that have been taken by the front office employees. On the other hand, the back office roles are mainly supposed to be operations roles and these mainly include the technology division as well. The professionals working here in are supposed to make transfers and generally make sure that there are no errors in what is being performed.
For a professional looking into getting hired by an Investment Bank, there are quite a lot of verticals to choose from. There is, of course, the investment banking division, there is private equity, equity research and fixed income, equity capital markets, fixed income sales or equity sales, trading, asset management, private wealth management and so on. Many professionals follow the conventional route of education qualifications while others follow the unconventional route of professional training institutes like Imarticus Learning for their entry in this field.